On your bike – market entry is not always an easy ride

At the end of last month there was a really interesting Guardian article by Helen Pidd about the various dockless bike-hiring schemes that have recently arrived in the UK, reviewing their different experiences and levels of success (see https://bit.ly/2OClDVg). It mentioned some market entrants: Mobike and Ofo (both from China), Donkeybike (Denmark) and Nextbike (Germany).

It set us thinking about some more general learnings for market entry:

  • Understanding market dynamics and market growth – slow, slow, quick, quick, slow? Dockless public bike hire is one of those markets that in certain UK cities has grown rapidly, from absolutely nowhere to something rather confusing due to the various offerings, and which has created extra problems in terms of abandoned bikes, theft and vandalism.  It’s always fascinating to watch certain market sectors where people continue to pour in – and raise investment – when, from a consumer point of view, it feels as though it must already have reached capacity and/or the sheer number of offers creates confusion. Standing out, for all the right reasons, is important.
  • Understanding cultural differences. The article points up the differences between cultural attitudes: in Singapore Mobike experienced virtually no instances of missing or stolen bikes compared to the UK, while Nextbike’s German parent company were reportedly shocked by the “generic levels of vandalism and theft in the UK”.  We always acknowledge that good research is crucial, but sometimes the depth or very specific nature of the information needed is not that clear looking from the outside in – or because there is no precedent for how different nations will react to products, the problem was never even considered.
  • The need for community engagement. Whenever you have an academic (the article quotes Manchester Metropolitan University) brought in to comment on your market, you know you have arrived, or caused a problem. The need to understand and engage with specific communities is paramount. There have been plenty of market entry failures across many different sectors. I have often had businesses tell me they were absolutely convinced that their offering was just what the locals needed and were surprised by the hostility or apathy they experienced.

If you’re thinking about UK market entry, we’d recommend you read the article and consider if and how the issues it raises relate to your own plans.

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