Interview: How Ofo is establishing its brand in Japan

Bicycle-sharing brands may seem to be everywhere in China and Southeast Asia, but the sector is still in relative infancy in Japan and Ofo is working to establish itself in the market while it still can.

Having launched services in Wakayama, Kita-Kyushu and Otsu, the Chinese company now has a marketing director on board as it looks to build understanding of the bike sharing concept and its own brand.

Mikihiko Hashimoto made the leap to Ofo after four years at Beacon Communications (now part of Publicis One), where he worked primarily on the agency’s Philip Morris account. Helping the world’s second-largest tobacco company sell more sticks might seem at odds with working for a service provider that (at least in part) aims to promote healthy living. But Hashimoto says introducing an entirely new product—Iqos—to the market was a “joyful experience”, and he hopes to feel something similar in introducing Ofo to Japan.

He says the biggest difference between working at a brand as opposed to an agency is the level of responsibility. “Agencies do think about strategy, but basically their [focus] is to get the next brief from the client,” he says. “The client is responsible for business performance. At Ofo, we also get direct feedback from users. There’s no filter as there was when I was at an agency.”

“Rather than rushing to expand the service and creating a mess, what we’re trying to do is see what’s best for each city and work towards realising it.”
—Yoshiaki Hiyoshi

Ofo is not currently advertising, but is working with Edelman for PR. Hashimoto says the immediate task is to make Ofo’s existing communications relatable for a Japanese audience. “In Japan, people have some resistance to Chinese brands,” he admits. “So we need to think how we can make the impression softer and more friendly.”

One way to do that is to present Ofo as a global brand, and indeed it already operates in 22 countries, with varying degrees of success. Hashimoto says elderly people are likely to care about the origins of the brand, whereas younger consumers will pay more attention to the service itself.

Hashimoto takes a moment to consider what the brand stands for. He says it aims to be a bridge between people and communities. The idea is to help people find or rediscover “hidden gems” by making places more accessible. The proposition is somewhat similar to that of Airbnb, and is supported by the fact that is focusing on regional areas rather than major cities.

Last year, a number of observers Campaign spoke to said bike sharing brands in Asia-Pacific lacked differentiation. Yoshiaki Hiyoshi, Ofo’s Japan head, argues that Ofo is distinct from “the bikes you see in red” (referring to Docomo Bike Share) in that the latter is funded by municipal governments. Therefore, Ofo has more incentive to provide a good service, he says. For instance, its easy-to-use app, compared with Docomo’s rather cumbersome sign-up process, is a key selling point that also makes it accessible to overseas visitors. “For us it’s do or die,” he says.

But Hashimoto admits that from a user’s point of view, the services can appear similar, and setting Ofo apart from other brands, which also include Merchari, a service operated by the online flea market Mercari, will be one of the biggest tasks they face. At the moment though, the emphasis is on education, not branding. Many people see the service as the same as a regular bike rental service, where share services are designed to be much more flexible, he says. Usage can range from an hour to taking the bike home overnight.

Ofo’s main target users are 20- to 40-year-olds—basically anyone who is used to using a smartphone. Despite being comfortable with technology, Japanese people tend to be cautious when it comes to new services, Hashimoto says. It was the same was Iqos. “Even if they are interested, they won’t try it unless they completely understand the service.”

Ofo’s education efforts are low-tech: events and flyers. The fact that Japan compels it to have docking stations (as opposed to being dockless in other markets) has pros and cons. On one hand, the ports should prevent the build-up of abandoned bikes that have caused chaos—and a lot of bad PR—in other markets. They also serve as a branding tool. On the other, they are costly and require additional explanation to users. Hashimoto wants people to understand that the ports are simply pick-up and drop-off points. If someone wants to leave park the bike at their office, they are free to do so.

Ofo hopes to gain traction by helping local communities. That means making places without public transport more accessible and reducing traffic and illegal parking. A campaign running in Hong Kong—not the most bike-friendly city by any means—provides routes to help users discover locations outside of central locations. Hiyoshi also sees a chance to solve the problem of bikes abandoned on university campuses when students graduate (universities are not at liberty to dispose of the bikes due to Japan’s strict registration system).
 

Ofo bicycles in China, where the bike share market is reaching saturation. In Japan, Ofo plans to expand more slowly. (Photo: AFP)

Hashimoto does not envisage using big celebrity endorsers, even though many brands see such tactics as a shortcut to gaining acceptance in Japan. “People will know it’s just a paid promotion,” he says. He expects word-of-mouth recommendations from actual satisfied users to carry much more weight. Hiyoshi thinks this applies to anything relating to the sharing economy, which, while now the norm in many markets, is still getting off the ground in Japan.

Elsewhere, Ofo is experimenting with blockchain technology to enhance shared mobility services. Earlier this month it set up a research institute for that purpose in Beijing. Things are not at that stage yet in Japan, where it has deployed around 500 bikes. But Ofo seems unhurried. Indeed, observers are questioning the future of the industry in China due to rapid expansion that has resulted in an oversupply of bikes.

“Rather than rushing to expand the service and creating a mess, what we’re trying to do is see what’s best for each city and work towards realising it,” Hiyoshi says. User feedback, data, and the flexibility to localise and adjust are central to the process. Hashimoto is not overly concerned by the negative press bike sharing has received in other markets. He is realistic that the more users there are, the more potential problems arise.

“People always look for the negative, so it spreads, but our style is to do trial and error and always try to improve,” he says. “Of course, the media doesn’t cover it once it’s improved. That’s where we as a brand have to appeal to people and demonstrate that we are improving our service and adapting to local needs.”