Home https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ Business https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ The giant giant Didi wants to be more than just Uber of China

The giant giant Didi wants to be more than just Uber of China



A user opens the Didi Chuxing ride-hail smartphone app in Shanghai, China, on September 18, 2020.

Qilai Shen | Bloomberg | Getty Images

BEIJING – China’s version of Uber, Didi Chuxing, is trying to use car travel as a way into several aspects of daily life from grocery stores to finance.

Didi submitted Thursday to list in New York what many expect could be the largest initial public offering in the world this year. The company was founded in 201

2 and is among the five largest privately owned start-ups in the world and counts SoftBank, Uber and Tencent as major investors.

Smartphone-based driving in China remains Didi’s primary business, generating $ 20.4 billion. In revenue last year in the middle of the total net loss of 1.62 billion. Dollars according to the prospectus. But when Didi swung to a profit in the first quarter of this year, the revenue share of “other initiatives” rose to 5% from 4% throughout 2020. That is an increase from 1.2% in 2018.

A quick look at Didi’s smartphone app reveals a number of other products tied to bike sharing, movers, personal finance and gas stations. The matrix of icons is similar to Alipay-affiliated Alipay, whose app is not only a mobile payment platform, but one that allows users to book airline tickets and pay for utilities. Likewise, Southeast Asia’s dominant app, Grab, provides food and wants to become a regional leader in mobile payments.

Eight types of car services

Didi is the primary app for riding greetings in China, even with access to several other players, including those focusing on high-end (Shouqi) or new energy cars (Cao Cao).

Users can choose from eight options at Didi, ranging from carpooling to luxury car service. Didi also lets users hail taxis through its app and runs a driver company that assigns drivers to car owners who may have had too much alcohol or can not drive their own vehicle for other reasons. These temporary drivers can travel between tasks on foldable bikes.

The company said it had 377 million active users annually and 13 million active drivers annually in China in the 12 months ending March 31st. Didi said it earned 133.64 billion yuan ($ 20.88 billion) in the “China Mobility” category last year.

Included with Didi’s other services like e-bikes and freight, customer costs for different kinds of products can run from 15 cents to more than $ 100, the prospectus said.

Building a financing arm

Didi said in his prospectus that the sharing of bicycles and e-bikes last year contributed most to its total revenue of 5.76 billion yuan from “other initiatives.” Other companies in the category include freight within the city, car rental, buying community groups and financial services.

The company said in August that its financial technology division Didi Finance – which was not mentioned in the prospectus – announced a partnership with the Bank of Shanghai on financial services for consumers and other digital financial products.

Didi has also partnered with China Merchants Bank to support credit card applications through the ride-hail app and offer repayment plans for cars. A Didi subsidiary works with Ping An Insurance to sell financing and leasing related products as well as insurance.

Start-up rents vehicles to drivers at prices that it claims are approx. 20% lower than outside Didi’s platform. While more than 600,000 vehicles are available for leasing, about half of these are owned by about 3,000 car leasing partners, reducing the amount of assets Didi is responsible for, the prospectus said.

Anecdotally, Didi recently promoted its own mobile payment system to some users in Beijing by setting it as the default payment option – at a discount. Users had to manually select other options such as WeChat payment, after which the rebate was removed.

Didi’s ride-hail app also works with international credit cards. The company operates in 15 countries, including Brazil, Mexico and Japan.

Bets on electric

Many analysts expect self-driving shared vehicles to become an important mode of transportation in the future rather than individual car ownership.

Didi has invested in its own autonomous driving unit, which launched “robotaxis” in a part of Shanghai in June 2020. The riding company announced in November that it was developing an electric car with BYD called D1, which would roll out to major Chinese cities in the subsequent months.

In May, the autonomous driving unit and the state-funded GAC Aion New Energy Automobile agreed to work towards mass production of completely self-driving new energy cars.

Didi claims that it has the largest charging network for electric cars in China, based on self-commissioned research.

Data protection and other risks

Didi’s planned IPO in New York comes as tensions between the US and China have been building over the past few years. The giant giant spent nearly three pages of his prospectus discussing risks of being removed from being unable to comply with U.S. government audit requirements.

The Chinese Government’s increased control over technology companies in terms of monopolistic practices and general regulatory control over data protection are also risks, as Didi mentioned in his prospectus.

In 2018, Didi came under fire from Chinese social media users – who called for the deletion of the app – after a woman was allegedly raped and killed by a driver. As a result, Didi announced that it would record audio during car rides, which would be deleted after seven days.

Didi did not specifically mention this feature in its prospectus.


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