Critical Review and Comment on Mobike Entering Malaysia

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External Analysis

Opportunities:

Political – Stability

According to a study on political stability among different countries by The World Bank, Malaysia’s have relatively stable policy around the world. The study indicates the risks of foreign exchange shortages, wars, revolutions, natural disasters and arbitrary government actions. As a result, Malaysia is defined as a relatively politically stable country. The average value of Malaysia stays at around 0.19 index points while China stays at -0.53 index points. That means Mobike is expending their business from a higher risk country to a low risk country. The policy in Malaysia should have a better protection for Mobike business.

Political – Taxation

When talking about taxations, Malaysia is one of those countries known to have different high tax rate. Although the corporate tax rate is 25%, which is as same as China, but the taxes on cars are totally different.

Malaysia is the world second most expensive place to buy cars, right behind Singapore according to motoring magazine Jalopnik. First of all, there is a 30% import duty imposed on vehicles imported from non-Asian countries which already made the commonly brought European cars very expensive. Then, the car prices are further escalated by the tax rate and excise duty imposed. According to Malaysian Automotive Association (MAA), the excise duty imposed on cars ranges from 65% to 105%, on top of the 10% sales tax (Malaysia Digest, 2015). Therefore, if a Malaysian wanted to buy a care like BMW 535i which sells for RM178,000 in USA, it would cost him about RM450,000 in Malaysia. The cost is twice as much as the original price after the tax is imposed.

The reason why car tax is so high is that Malaysia government are trying to focus on public transportation rather than citizens creating a crowd urban traffic. “Reducing taxes would also mean many more cars on the road, more congestion on the road, burden on households, more parking problems, and with the poor public transport...so that should be there first.” Datuk Paul Selvaraj said, the CEO of Federation of Malaysian Consumers Associations. In view of this, the Malaysia government prefers more environmentally friendly transportation rather than motorcycles. The vision of Malaysia government totally synchronized with the vision of Mobike.

Social/Cultural Environment – Internet Usage

Mobike is a company which aimed to bring the most efficient O2O experience to the customers. First of all, customers have to register an account on Mobike application and make a deposit in order to rent a bike. Then, they can easily look for the nearest Mobike available by the GPS system on the application. Right after they reach their target location, customers can park anywhere that shows legit on the GPS map and the lock with be automatically closed. From the layer of the company to the customer, all people need is just a smartphone.

According to a UBS research on e-commerce among Asia countries, Malaysia’s internet penetration have reached 46% and estimated to be at 60% high in 2017 (TheGlobalEconomy, 2016). The figure is both higher than the average penetration rate among the listed Asia countries.

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Furthermore, Google also made a research on different internet usage of Malaysia. The result indicated that Malaysia is one out of only five places in the world where smartphone usage is higher than computers at 51% VS 39%. Also, the Malaysian users are surveyed to say that they exclusively use their smartphones and no other device to access the Internet making Malaysia the #1 country in the world when it comes to smartphone Internet access exclusivity.

With such high usage and the dependence on smartphone in Malaysia, customers should find Mobike application easily adopted and extremely user friendly.

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Economic – Employment status

As mentioned in the previous section, Mobike’s distribution channel is mostly online. The type of workers Mobike needs would be IT workers. According to a survey done by ACCCIM (The Associated Chinese Chambers of Commerce and Industry of Malaysia), Malaysia firms are now in shortage of Skilled Workers and General Workers. The shortage on IT workers only remains in 2%. As a result, it is believed that for an IT driven company like Mobike, it is not a problem to hire local IT specialist.

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Competitor

As long as the high enthusiasm Malaysia government wanted to create an environmentally friendly city, the Penang Island City Council already announced the first bicycle-sharing system in 2016 called Link Bike. Malaysian was feeling excited on the announcement.

The trail run was on December 2016. It was free of charge at that period and the citizens in Penang were willing to try the Link Bike. However, the comments of them are mostly negative. According to newspaper Sinchew, they can barely find any people riding Link Bike on the street even if they check the bike-sharing station every half hour (Sin Chew Daily, 2017).

First of all, most of the people found that it is hard to find a bike-sharing station nearby as the stations are not enough. Also, the instruction board at the station can only display in English which cause many of the citizens feeling confused about the instruction.

Such circumstance is a great chance for Mobike since the weaknesses of Link Bike are the strength of Mobike. They have an easy and simplify instruction on their application providing both Chinese and English version. Also, the idea of station-less can address the problem of lacking enough bike stops.

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Threads:

Technological – e-Commerce

Involvement in e-Commerce: Although the internet penetration and smartphone usage of Malaysia is very high compared to other Asia countries, the involvement in e-Commerce is still very low.

According to a survey done by ACCCIM (The Associated Chinese Chambers of Commerce and Industry of Malaysia), Malaysian are still bond of using the conventional