Innovation drives new economic growth

What's Ofo's business model? How does the company gain profits? Do you mainly gain from the deposit?

Dai Wei: It's more like the car-hailing business, where we offer products for users to rent and users pay by times. In fact, even though users only need to pay 1 yuan (16 cents; 0.13 euro; 12 pence) per time, the profit rate of bicycle-renting is far better than cars.

Our main profit comes from the rental fees rather than the deposit. Deposit is not a property that users can invest to preserve or increase the value. It is not at all a product and, from my perspective, will not exist in the long run. We've never diverted the deposits for other purposes, and we are waiting for government policies on how to deal with them.

For our 3.2 version of Ofo bike, the cost is 400 yuan. By June 2017, an Ofo bike is usually used four to five times a day, which generates a revenue of four to five yuan. We can recoup the cost of one bike within half a year. We are profitable in many cities, with the maximum profit hitting 40 percent.

Shared bikes have caused many problems. There are people who keep the bikes as private. In extreme cases, some groups can decode the pin of shared bikes. What's your feeling toward this?

Dai Wei: At first, I felt anxious and sad. But now, I think that what we need to do is to continue increasing scales and using our resources to get used to such a concept and then use it. Our statistics show that fewer bikes are being damaged as more and more are placed on the street. When a newcomer enters, it will face various challenges.

How big do you think Ofo's market will be? What's your plan in the future?

Dai Wei: Five billion people across the globe will ride bikes. Even now, more than 100 million bikes are sold every year. You can see people riding a bike in nearly every corner of the world. In the future, we hope that we can serve several million people every day and Ofo can be found everywhere globally.

The internet of things will be a certain trend. We are cooperating with Huawei and China Telecom in doing the next generation of IoT product. It may become one of the largest applied scenarios for narrow-band IoT. In the future, bikes will be interconnected and can help governments to collect data including air quality and traffic jams.

This year marks the 40th anniversary of the nation's reform and opening-up. What opportunities and challenges do you think the reform and opening-up have brought to Chinese tech companies?

Liu Zihong: A great number of talents in Chinese tech companies, especially internet companies, were born after the launch of reform and opening-up and thus have enjoyed benefits brought by this policy.

These talents are able to receive high-quality education from home and abroad to grasp advanced knowledge in technologies and form an innovative mind, thanks to the reform and opening-up.

In addition, the deepening of reform and opening-up has brought up a group of Chinese internet giants and provided them with a great innovative environment, so that they are able to survive and grow.

We notice that some Chinese enterprises have already stood at the forefront of fields including e-commerce and mobile payment, but going forward further they will need to explore some "no man's land".

It requires that entrepreneurs be more innovative to explore some unexplored fields to catch up with some precious opportunities.

What do you think about Chinese internet companies' innovations in recent years? Which fields are expected to become the next frontier of innovation?

Liu Zihong: Chinese internet enterprises have grown at an unprecedented speed, with some of them having stood out to lead the world, such as e-commerce and mobile payment.

I think that human-computer interaction, artificial intelligence and IoT are expected to be trendsetting in the future, and each of them will be able to become an important platform to serve a wide range of industries.

Human-computer interaction became crucial last year. It will develop rapidly and start to be applied to a large scale this year.

In the field of human-computer interaction, only limited types of technologies have the potential to become such platform-like technologies. I think that flexible electronics has great potential, as it breaks the limit of physical space and has wide applications in a variety of industries.

What are Royole's core businesses and how do they develop?

Liu Zihong: Our businesses are underpinned by technologies of flexible displays, flexible sensors and smart devices, with all three developing neck and neck.

We are also integrating them into one technological platform called Flexible+. It represents the idea that our fundamental and innovative technologies regarding flexible electronics will be applied to a wide range of industries including smartphones, tablets, wearable devices and smart home, as well as intelligent architecture and decoration.

Royole has accumulated more than 1,700 patents, which means one patent nearly every day. How has Royole achieved this?

Liu Zihong: In fact, if you and your team really focus on innovation, you just come up with new ideas continuously with patents coming naturally.

In Royole, about 70 percent of employees are technical and R&D staff, who come up with great ideas every day. Our R&D costs accounted for roughly 80 percent of the total spending in the first three years.

The past two years witnessed a decrease of R&D as more of our products have entered the market, but still, over half of the total spending is on R&D.

How large will the market for flexible electronics be?

Liu Zihong: Some international research institutes predict that the market size of flexible electronics is expected to exceed $300 billion in the next five to 10 years. It is hard to say how accurate this figure is, but I believe that the market will be huge, as flexible electronics technologies are universal and can be applied in various industries.

Royole was established and operating in three places, including Silicon Valley, Hong Kong and Shenzhen simultaneously. What was your consideration behind this unusual decision?

Liu Zihong: It was not an easy decision. We were very cautious about it, as we were afraid that such a large-scale operation would pose a heavy burden in a startup's early development and may even drag the company down to collapse.

This decision was based on what we are going to do in the future. We need to integrate different resources of those three places to facilitate our businesses.