The implications of Didi’s removal from WeChat and Alipay
The ride-hailing service Didi Chuxing (known as Didi) has been removed from mainland China’s popular payment apps, WeChat and Alipay. Since its launch in 2012, Didi has grown to become the country’s largest provider of ride-hailing services. Their removal from WeChat and Alipay will likely stop their rapid growth and could impact China’s transportation industry.
In this article, we will look at the implications of Didi’s removal from WeChat and Alipay, focusing on their impact on transport companies and consumers in China. We will also discuss other providers’ strategies to adapt to the changing environment. Finally, we will consider how this incident could shape the future of transportation services in China.
Overview of Didi
Didi Chuxing, commonly known as Didi, is the leading ride-hailing platform in China. It is a conglomerate of taxi, express, chauffeur, bike-sharing, ride-hailing and carpooling services. It’s been a leading force in China’s mobile transportation revolution. Still, recently the company was removed from WeChat and Alipay, two of China’s most popular apps, for new users in a big blow to the brand.
It’s worth further looking into the background on this situation to understand the implications of this move.
Background and history of Didi
Didi Chuxing Technology Co., Ltd. (commonly referred to as ‘Didi’), is a Chinese tech and transportation multinational company, founded in Beijing in 2012. It is the world’s largest ride-hailing platform, providing over 9 billion rides since its conception, with over 3 million drivers on its network.
From 2015 to 2018, Didi rapidly grew in popularity due to a series of mergers, acquisitions and strategic alliances with tech companies across China and the world. In April 2016 it also announced a partnership with Apple Inc which allowed users to book an array of services provided by Didi on WeChat platforms.
In 2019, following several reports on safety issues relating to its services, Didi’s app was removed from both WeChat and Alipay payment systems in China. This resulted in the subsequent decline of its previously strong position within the ride-hailing sector and caused huge waves within China’s tech sector and billions of losses for the company.
Didi’s market share in China
Didi Chuxing is one of the largest ride-hailing companies in China and the most popular ride-hailing app in the world. Founded in 2012, it has gained massive traction over the years. According to a report by Bloomberg Intelligence, Didi’s market share of the on-demand mobility services market was nearly 80% in 2019.
Since its launch, Didi has become an integral part of everyday life in China and has seen tremendous growth in capital funding, coverage areas and users. According to statistics from Beijing News, Didi has reached more than 1 billion rides served with 18 million drivers and 450 million users on its platform as of December 2018.
The growth rate is unprecedented and there’s no question that Didi is currently operating at the top level of all Chinese ride-booking apps, even taking into account recent issues with passenger safety. In addition to its expansive network, it strives to provide an eco-friendly transport network supporting sustainable development around Chinese cities.
Didi partners with various local municipalities for major services such as bike sharing and integrating public transit services via their softwarization model, Mobility-as-a-Service (MaaS). As a part of their MaaS model, they offer pickups from designated stops integrating public transit with private transport vehicles akin to a microtransit service.
Didi removed from China’s WeChat and Alipay apps for new users in another big blow
Didi, one of the most popular transportation apps in China, has been removed from WeChat and Alipay for new users, resulting in a major blow to their business. This move has significant implications for Didi’s business and other Chinese companies, as WeChat and Alipay are two of the most popular digital payment methods in the country.
This article will look at the implications of Didi’s removal from WeChat and Alipay.
Impact on Didi’s market share
Didi’s removal from WeChat payment and Alipay greatly impacted their market share in the Chinese ride-hailing industry. As a result, as of July 2019, Didi’s market share fell to 79.2%, down from 86.6% in 2018, and its order volume fell to 63.8 million rides per day, down from 66 million rides in October 2018.
At the same time, other companies such as Meituan Dianping (8.9%), Shouqi Limousine & Chauffeur (3.7%), Alibaba’s Kuaidi Dache (2%), and Shenzhou Zhuanche (1%) all saw an increase in their respective market shares at the expense of Didi’s decline.
Apart from the decline in market share and daily ride orders, Didi’s removal also led to a drop in its affiliated merchant businesses, including taxi taxis using DiDi services for ride-hailing leading to a decrease in direct revenues for taxi operators as well as a decrease in access fees for DiDi itself due to declined demand for its services from end users without access to wechat or alipay payments or subsidies bundled with them. In addition, this led to further losses for the firm due to less bonus payments from partnerships with merchants which previously formed part of its growth engine leading up 2019 till now.
Impact on Chinese consumers
The removal of the Didi icon from WeChat and Alipay was a shock to many Chinese consumers and businesses. Many people have become used to the convenience of using Didi for booking rides rather than searching for a taxi on the street or calling for one. This change may cause difficulty returning consumers to their previous comfort levels, decreasing regular users.
On the other hand, emerging competitors such as DropCar and GoCab may take advantage of this opportunity to gain market share. In addition, as people are forced away from Didi, some may use these services instead. Furthermore, other online-payment competitors will gain strength as consumer preferences shift towards them due to the lack of Didi’s presence on WeChat and Alipay.
Ultimately, existing businesses such as transportation services companies must adopt creative strategies to gain consumer trust and ensure their presence in the changing landscape of Chinese consumer preferences due to the removal of Didi from popular mobile payment apps.
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