Can Didi Chuxing Become The Next Super App Like WeChat?

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In my own opinion, YES, Didi Chuxing (Didi) can become the next WeChat-like Super App. A Super App has a huge user base and a dominating market share, a high usage frequency, and is the entry portal for many other service offerings.

Didi – A Clear Winner In China With A Huge Customer Base

According to KPCB report, China accounts for ~70% of global on-demand trips. After the acquisition of Uber China, Didi now would have +90% China market share and +350 million users by iResearch. Didi is the largest player in the world by the number of trips and the number of customers. They have probably already achieved critical mass and economy of scale. Didi can reduce marketing expenses, driver subsidies, passenger subsidies, and become profitable in some markets. Also with this scale, Didi can pick the battleground and crush local competitors. They can choose a regional market, then subsidize target market with profitable ones.

Didi Can Easily Expand Into Other Related Services

Uber global data shows that an active user, in average, would open the app 4.5 times/week. Due to lower car ownership and an insufficient public transportation infrastructure, Didi’s number is probably higher. Most Tier 1 and Tier 2 cities in China have high population densities. Buses and subways are packed during rush hours, plus there are not enough roads to support the number of cars in cities. Congestions are common in those cities yet, they are having a hard time to further expand public transportation infrastructure. The government wants to increase transportation efficiency rather than car ownership. They do so by limiting private car license using auctions (Shanghai) and lotteries (Beijing). Sometimes, the cost of a license is higher than the cost of the car itself. Didi’s (and Uber’s) carpool service is one of the answers to this problem. At the end of July 2016, the Chinese government issued a new regulatory policy allowing ride-sharing in China. There is a huge growth potential for Didi’s customer usage frequency.

Didi Has A High Usage Frequency And Is Likely To Get Higher

Didi has expanded from taxi hailing to include private ride sharing, bus/shuttle services, test driving, and driver hiring. I would not be surprised to see auto insurance, car rental, as well as short vacation package offerings in the future. Uber had also tested UberEATS, parcel deliveries, music for the journey, and book club ideas. The relatively exclusive passenger time (and attention) during commute could provide a huge business engagement / entertainment opportunity. As long as the user base remains active, opportunities are endless.

MY PREDICTION: We are likely to see this happening in the next 1-2 years.

Thank you for reading.

Update 9/9/2016: Didi just announced to roll out car rental service in Shanghai today.

This article was originally published on LinkedIn by Mr. Xing Gao.

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Russell Smith
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Russell Smith

My first opinion (on seeing the title) was like… nah man, whatever.

But actually – you’re right – everybody uses it all the time and is really familiar with it – trust is super high.

And a really key point is that most people are already very familiar with making financial transactions / purchases through the app, so there shouldn’t be any resistance asking for payments and making sales of other products and services there too.

Interesting!

PS. Where’s Disqus gone?

– Russ

Michael Michelini
Admin

Hey Russ,

greetings from DCBKK : )

I think the key for any of these apps is to get the eyeballs – and then become a complete one stop for anything somewhat related to that service.

Uber is thinking the same thing – making an API so people can connect their car service with their … say travel service, or anything that involves transportation.

Disqus – got rid of it – too slow and I feel people leave more comments without having to make an account on their system, what do you think?