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

Giant giant Didi wants to be more than China’s Uber

User opens the Didi Chuxing smartphone app in Shanghai, China, on September 18, 2020.

Kilai Shen | Bloomberg | Getty Images

BEIJING – The Chinese version of Uber, Didi Chuxing, is trying to use car travel as a way to cover many aspects of everyday life, from grocery shopping to financing.

Didi filed a list in New York on Thursday in what many expect could be the largest initial public offering in the world this year. Founded in 201

2, the company ranks among the five largest private startups in the world and considers SoftBank, Uber and Tencent as major investors.

The smartphone base in China remains Didi’s core business, generating $ 20.4 billion in revenue last year amid total net losses of $ 1.62 billion, according to the prospectus. But while Didi turned to profit in the first quarter of this year, the share of revenue from “other initiatives” rose to 5%, from 4% for the whole of 2020. This is more than 1.2% in 2018.

A quick look at Didi’s smartphone app reveals many other products related to sharing bicycles, movers, personal finances and gas stations. The array of icons resembles Alibaba-related Alipay, whose application is not only a mobile payment platform, but which allows users to book plane tickets and pay for utilities. Similarly, the predominant app for welcoming cities in Southeast Asia delivers food and wants to become a regional leader in mobile payments.

Eight types of car repair shops

Didi is the main welcome app in China, even with the entry of several other players, including those who focus on high-end (Shouqi) or new energy vehicles (Cao Cao).

Users can choose from eight Didi options, ranging from shared travel to luxury car services. Didi also allows users to greet taxis through its app and runs a driving business that hires drivers from car owners who may have had too much alcohol or can’t drive their own car for other reasons. These temporary drivers can travel between folding bike assignments.

The company said it has 377 million active users a year and 13 million active drivers a year in China for the 12 months ended March 31. Didi said she made 133.64 billion yuan ($ 20.88 billion) in the “Chinese mobility” category last year.

Including Didi’s other services such as electronic bicycles and cargo, customers’ costs for various types of products can range from 15 cents to over $ 100, the prospectus said.

Building a financial arm

Didi points out in his prospectus that the sharing of bicycles and e-bikes has contributed the most to its total revenue of 5.76 billion yuan from “other initiatives”. Other businesses in the category include intercity freight, car leasing, group purchases and financial services.

In August, the company said its financial technology division, Didi Finance – not mentioned in the prospectus – announced a partnership with the Shanghai Bank for consumer financial services and other digital financial products.

Didi also partners with China Merchants Bank to support credit card applications through the travel app and offers plans to purchase installments for cars. A subsidiary of Didi works with Ping An Insurance to sell products related to financing and leasing, as well as insurance.

The start-up company rents vehicles to drivers at prices that he says are about 20% lower than those outside the Didi platform. While more than 600,000 vehicles are available for rent, about half of them are owned by about 3,000 vehicle leasing partners, which reduces the amount of assets for which Didi is responsible, the prospectus said.

In an anecdotal way, Didi recently promoted his own mobile payment system to some users in Beijing, setting it as a default payment option. Users had to manually select other options such as WeChat pay, after which the discount was removed.

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

Electric bets

Many analysts expect that self-driving shared vehicles will become a major mode of transport in the future, rather than an individual vehicle.

Didi invests in its own autonomous driving device, which launched robotaxis in part of Shanghai in June 2020. The travel company announced in November that it had jointly developed an electric car with BYD called the D1, which will be launched on market Chinese cities in the coming months.

In May, the autonomous drive and the state-owned GAC Aion New Energy Automobile agreed to work on mass production of fully self-driving new energy cars.

Didi claims to have the largest electric vehicle charging network in China, based on custom research.

Data confidentiality and other risks

Didi’s planned IPO in New York comes as tensions between the United States and China have accumulated over the past few years. The giant, who welcomed the trip, spent nearly three pages of his prospectus discussing the risks of being written off from failing to comply with U.S. government audit requirements.

The Chinese government’s increased control over technology companies over monopolistic practices and general regulatory control over data confidentiality are also risks that Didi points out in his prospectus.

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

Didi did not specifically mention this feature in his prospectus.

Source link