There are many reasons why ofo went to the bottom, three of which are the most important: First, the spread of negative news caused users to lose confidence in ofo; The second is the operation of burning money, but it has little effect. The third is that there is no capital support and it is squeezed out by the capital of Ali and Tencent.
First, unauthorized misappropriation of user deposits led to the outbreak of deposit refund.
Ofo reports long-term arrears with upstream suppliers. In 20 18, at least nine companies took ofo to court for contract disputes, and the company and its founder Dai Wei received it. Spending restraint order? . And the financing in the first half of the year has already hit Shui Piao in the second half of the year. The company failed to find suitable financing, the capital chain was broken, and the user deposit was misappropriated privately, causing public panic. After the fermentation of the media, nearly 9 million users initiated a deposit refund request to ofo. Such a large sum of money has caused ofo to decline rapidly.
Second, there is no profit without considering the cost of burning money. Little yellow car has not been profitable since its birth, because of its high cost: the research and development and upgrading of technology have increased the cost of little yellow car, and overwhelming advertising has only made it famous without making money.
Third, lack of capital support, the capital of Ali and Tencent crowded out ofo. At that time, the strongest competitors were mobike and Hellobike. Mobike was acquired with the backing of Tencent's capital, and Hellobike harvested the financing of Ant Financial Services with the backing of Ali's capital, and ofo struggled.
But the decline of a company is not only due to external reasons, but also has problems in its own internal operation.