The Rise and Fall of the Shared Power Bank Industry: Lessons from Capital Frenzy to Rational Return

Introduction: The Complex Game Behind a Seemingly Simple Business Model

The shared power bank industry, born in the era of mobile internet, was once the darling of capital markets. From its explosive growth in 2017 to the present day, we’ve witnessed multiple companies complete the full cycle from rapid rise to crisis in just a few years. Through the reflections of industry pioneers, we can glimpse the fatal traps hidden behind this seemingly straightforward business model.

I. The Fatal Mistake: Treating Others’ Money as Your Own

1.1 The Temptation of Massive Deposit Pools

Between 2017 and 2019, before the industry implemented deposit-free rentals, major platforms accumulated enormous user deposits. Industry insiders reveal that Company A held deposits of 350 million yuan, Company B reached 850 million yuan, and Company C accumulated 500 million yuan. Beyond user deposits, undrawn merchant funds were equally substantial, with some companies holding over 120 million yuan.

1.2 The Vicious Cycle of Fund Misappropriation

Faced with massive cash reserves, company executives found it difficult to resist expansion temptations. They invested these funds—which never truly belonged to them—into market expansion, creating a dangerous cycle: using money to gain scale, leveraging scale for more funding, then using that funding for further expansion. This model inevitably led companies to continuously seek external financing, even pursuing IPOs to fill funding gaps.

II. From Glory to Crisis: The Industry’s Turning Point

2.1 White-Hot Market Competition

The early shared power bank market brimmed with opportunities, as companies rapidly expanded through various strategies. Some seized prime locations, while others adopted a “surround the cities from the countryside” approach. However, as competition intensified, defensive costs soared, and battles for premium locations became increasingly fierce.

2.2 Tech Giants Reshape the Landscape

While traditional players fought for market share, the entry of internet giants fundamentally altered the industry landscape. One major tech company, leveraging its powerful resource integration capabilities and brand influence, quickly captured significant market share, targeting over 70% market dominance. This placed unprecedented pressure on existing market participants.

2.3 The Funding Dilemma of Technological Upgrades

Around 2023, the industry faced a wave of technological advancement, including fast-charging capabilities. However, companies that had already depleted their cash reserves could only watch helplessly as massive investments were required for these upgrades. Companies lacking innovation capabilities gradually fell by the wayside.

III. Business Model Reflection: Avoiding History’s Mistakes

3.1 Redefining Corporate Roles

Industry lessons sparked new business models. One emerging company proposed a “hands-off money” philosophy, positioning itself as a system service provider rather than a financial intermediary. This approach fundamentally avoided risks of fund misappropriation.

3.2 The Wisdom of Risk Distribution

Through a “divide and conquer” strategy, risks were distributed among numerous small operators. Each operator needed only to serve a few hundred customers, simultaneously reducing operational risks while improving service quality. This model allowed all parties to develop healthily within manageable boundaries.

IV. Future Outlook: The Path of Small but Beautiful

4.1 Regional Deep-Dive Strategy

In a market dominated by giants, opportunities for small and medium enterprises lie in focused cultivation. By providing quality service within specific regions and becoming the second choice after major platforms, companies can still achieve stable returns.

4.2 The Value of Differentiated Services

As the market matures, users increasingly demand service quality. Companies that provide differentiated services and prioritize user experience can secure their market position, regardless of size.

Conclusion: Respecting Business Laws and Returning to Value Creation

The shared power bank industry’s evolution provides invaluable lessons for all entrepreneurs. Maintaining clarity amid capital temptations, exercising restraint during expansion impulses, and upholding principles under competitive pressure—these seemingly simple truths form the foundation of sustainable business development.

The future of the shared power bank industry will no longer be driven by capital-fueled rough growth, but will return to its essence: creating value for users and providing convenience to society. Only companies that truly understand business fundamentals and respect market laws will thrive in this industry’s next chapter.