DiDi-affiliated RenRenChe Releases A New Strategy in 2019 and Denies the Bankruptcy Rumors

Feb 18, 2019/EqualOcean/- Renrenche (人人车), the DiDi-affiliated peer-to-peer second-hand car trading platform, announced its brand new 2019 strategy of New Platform and New Retail. The company will operate on the new platform under the new strategy, leveraging the advantage on brand, technology and resources, according to RenRenChe CEO LI Jian(李健) in an internal letter reviewed by EqualOcean.

Renrenche launches a CNY 80 million (USD 11.8 million) specialized investment fund to help targeted partnerships in a guaranteed sales service, which means partnerships pay a certain percentage of final price for owners before selling out, giving sellers a more accurate sales estimate for their vehicle and an indication of when it is likely to be sold. Renrenche plans to open new retail stores, providing used car trading, evaluation and inspection, pricing, auto finance, insurance and warranty services for partnerships. To build a whole ecosystem covering car trading, maintenance and insurance services, the company aims to invest more on advertising.

DiDi Chuxing, the ride-hailing giants in China, has been reported to purchase over one million second-hand vehicles from RenRenChe, one of its investees, over the following 3 years, highlighting the company’s mission to change from a light-asset model to a heavy-asset model. DiDi invested USD 200 million to the company in September 2017, overtaking Tencent as its largest institutional investor. RenRenChe secured a USD 300 million Series E round of funding backed by Goldman Sachs, Didi Chuxing and Tencent – currently the platform’s two top institutional shareholders.

The company was rumored to cut 20% of stores November 2018 out of cost control. RenRenChe will keep on operating in tier 1 and tier 2 cities.

DiDi has adjusted its management structure to address the safety concern last December, in which the former Xiaoju Automobile Solutions and Didi's Asset Management Center (AMC) will be minted into a new group called The Automobile Solutions Platform, setting to explore retail opportunities, and sells a flurry of existing services, including car sales, loans, car maintenance and refueling. Feb 15th, the company announced the new human resource plan to cut around 2,000 bellow-performance employees in the coming layoff, which is 15% of the total. In September 2018, the CEO CHENG Wei (程维) released that DiDi generated CNY 4 billion (USD 588.2 million) loss in 2018H1. The loss incurred in 2017 was approximately USD 300 million.