Detours Or Shortcut? A Glimpse Into the International Expansion of DiDi and Uber
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DiDi Chuxing(滴滴出行)has entered partnerships with several major international players and Uber has picked up and chosen to battle in 2018.

The Global Expansion of DiDi

Latin America. In 2017, DiDi led a USD 100 million investment to 99, a Brazilian ride-hailing company. One year later, in Jan 2018, on heels of getting USD 4 billion of fundraising, Didi announced the acquisition of 99 valued at USD 600 million to buy shares from 99's previous investors, and add another 300 million to fuel regional expansion. It is the company's first movement of overseas acquisition worth at USD 1 billion in total.

April 2018, DiDi launched its own ride service in Mexico, setting up a potentially costly battle with Uber which has 7 million users in the country and covers 30 cities. It was the company's first face-to-face war against Uber outside of Asia. DiDi's strategy was not to cut any pieces of drivers' fares till June, after Mid-June, DiDi would start to only take 20% commission out compared to Uber's 25%, reported by Reuters.

Asia. DiDi plans to provide an app-based taxi-hailing platform named Didi Mobility Japan in Japan with Softbank, which is a main backer of DiDi. Trial service will cover at least four cities including Tokyo, starting from this year. In Hong Kong and Taiwan, DiDi released new apps to enable locals to hail taxis. In Taiwan, DiDi is partnered with local tech company Ledi for a license agreement.

It seems that DiDi believes that working with local taxi companies is an efficient way to get authorities' support. "If there are suitable domestic partners, we will empower them to succeed, be it by using our capital, technology, products or experience. But if there are no suitable partners, we'll enter ourselves." ZHANG Bo(张博), DiDi's CTO, said in an interview with Financial Times.

The Global Network. DiDi has teamed up with Singapore's Grab, India's Ola, Estonia's Taxify, Careem in Dubai and U.S.-based Lyft, by investing and sharing technology. Take Lyft as an example, DiDi users were able to hail a taxi throng Lyft and vice versa, although the service has been temporarily paused. On June 15 2018, DiDi started its operation in Australia officially.  

It's a question: To barge in a shortcut, or to detour?

The battle between DiDi and Uber in China has ended by August 2016, with DiDi acquiring Uber China and in return, Uber got a 17.7% share in DiDi. Now the two archenemies are firing up in the global chest again.

However, DiDi chooses a less aggressive and cautious way.

Unlike Uber's antagonistic approach to expand into a target market and seize the largest market share, DiDi takes relatively conciliatory and multiple ways. The company undertakes three-pronged ways including acquisitions, partnerships with local players and natural growth, all backed by a huge amount of fundraising.

In July 2017, DiDi injected USD 2 billion into Grab, along with SoftBank. In March 2018, according to Fortune, Uber would merge with its big Southeast Asian rival, Grab. Uber will get a 27.5% stake in the combined firm, 500 staff will transit to Grab, and its customers will be shifted over to Grab's apps. Just like what the company did two years ago in China market.

According to Forbes, in Japan, where ride-hailing is forbidden by law, Uber only recently warmed up to partnering with local taxi companies to act like an on-demand dispatcher in Tokyo while its archenemy DiDi is providing its taxi-booking service covering four cities as mentioned above.

We may address the event as Didi has beaten Uber, partly, when it comes to the strategy aspect.

Uber gave up some market share by merging its business with homegrown rivals in Russia, China and Southeast Asia and departure for long. In Russia, Uber opted to merge with Yandex.

Uber's rough ride continues in Europe where regulations are threatening its business. Even if they won the torsion in England and France but failed in Germany with a guarantee to only operate its taxi service. The company has faced Argentina's protest and Spanish taxi drivers' strike while it took dominant position in Australia. In the Middle-East, Uber is in discussion to buy its Dubai-based rival Careem reported by Bloomberg in September 2018. The battle for the company just far from over.

Actually Uber itself admitted that Uber's strategy to barge into a new market without considering local situations carefully has put the company into a position where it faces too many battles across too many fronts with too many competitors, leading to the result of losing valuable market where it did not operate and the battle where it did.

But we have to admit that Uber did move faster than DiDi in the global expansion and learned fast from winning over regulators no matter in its home country or worldwide. On the other hand, DiDi did not yet jump into the battleground against Uber with main force. Partnerships and investments, after all, are rather moderate ways, not even a progress of gaining market dominance.

——Author: LinYan. Write to LinYan at 

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