• 08.02.16

Here’s why Didi prevailed over Uber in China

After a long battle for ride-sharing supremacy in China, Uber waved the white flag this week and agreed to leave the country for a 20% stake in competitor Didi and also a $1 billion investment from the company. The terms of the deal showed Didi had the upper hand in China, but just how did they get that? Reuters has an interesting report that explains why Didi came out on top. Among their key findings:

• Didi had two of the most powerful, best capitalized Chinese Internet companies as backers: Alibaba and Tencent, which allowed them to offer payment options to riders via Alipay and WeChat.

• Didi had a much bigger presence on social media.

• Uber entered the Chinese market too late.

• Didi began its business focused on taxi-hailing, thus making an ally of local taxi drivers, while Uber focused on privately owned cars. A mistake, as in China vehicle ownership is low.

• Didi understood the local culture well, while Uber was trying to import ideas that worked well in other markets and apply those to China.MG