Chinese ride-hailing giant Didi Chuxing’s (滴滴出行) overseas business has turned a corner after dropping to a low in the middle of last month amid the COVID-19 pandemic and is already looking into new markets and payment firm acquisitions, a senior executive said.
Although bullish about future prospects, Tony Qiu (仇廣宇), chief operating officer of Didi’s international operations, conceded that the business expects a “double-digit” percentage hit in the short term, echoing gloom across an industry squeezed by travel restrictions in many countries to contain the novel coronavirus.
“Business has recovered a little since reaching a low in mid-March,” Qiu said in an interview. “In the short term it will impact our business by double-digit, but we hope by doing what we do during the epidemic, we will overcome the virus,” he said.
Photo: Reuters
Last week, Uber Technologies Inc warned of an up to US$102 million revenue hit in the first half of this year, while Singapore-based Grab Holdings Inc said that its ride volumes have fallen by a double-digit percentage in some countries.
Uber withdrew its forecast for this year for gross bookings and earnings, while Grab said that it would cap costs.
BOOMING BUSINESS
Uber owned at least 15 percent of Didi as of September 2018 after selling its Chinese operations to its one-time rival in 2016.
Now easily the biggest ride-hailing firm in China, Didi has also been backed by Japan’s Softbank Group Corp to the tune of nearly US$12 billion and was valued at US$56 billion in a 2017 financing round.
Qiu declined to be more specific on the financial details of the pandemic’s effects on operations.
He said that his business unit saw daily rides hit a peak of 5 million before the epidemic.
On average, daily overseas rides account for about 20 percent of Didi’s entire ride-hailing operation.
Underlining the company’s bullish approach, Didi CEO Cheng Wei (程維) last week said that the firm aims to have 800 million monthly active users globally and complete 100 million orders per day by 2022, including ride-sharing, bike and food delivery orders.
Demand for Didi in China has been recovering quickly since the easing of city lockdowns due to the pandemic, the company said.
One of the firm’s main products, Anycar, through which passengers can hire ride-hailing cars or taxis, last month saw orders more than triple from February.
OVERSEAS EXPANSION
Qiu declined to say how much his business unit might invest in new acquisitions.
“Acquiring and working with payment companies which have the banking license, payment or financial technologies would bring advantages to Didi’s global business,” Qiu said, adding that there are no clear plans yet for any deals.
Beyond China, Didi operates in eight countries in Latin America, Australia and Japan.
New markets being studied could be in Europe, the Middle East and Africa, Qiu said, but added that Didi has no clear plan to enter Southeast Asia and the US for now, as those markets have already become fierce battlegrounds for the likes of Uber, Lyft Inc, Grab and Indonesia’s Gojek.
Other expansions being considered would be food delivery services and payment operations in markets where it is already present. Didi already delivers food in Japan, Brazil and Mexico, and is rolling out on-demand delivery and courier services in Australia and Latin America.
Didi is also exporting practices developed in China to cope with the pandemic, Qiu said.
For example, in Mexico it is offering instructions to drivers on how to install protective plastic sheets in their vehicles, while it is helping to disinfect vehicles in Brazil, he said.
It is also looking into how it can better use technology to trace infected people, Qiu said.
Online booking allows easier contact tracing than conventional taxis, and technologies used by Didi’s platform helped Chinese health authorities quickly track down infected cases, as well as those who had close contact with them, he said.
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