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Taxi-hailing apps Didi, Kuaidi enter new round of competition

Taxi-hailing apps Didi, Kuaidi enter new round of competition

Staff Reporter

2014-06-20

Didi and Kuaidi, two of China’s leading taxi-hailing apps, have commenced a new round of marketing by offering discounts, but the two are competing under different circumstances now as they have both achieved market dominance, reports Shanghai’s China Business News.

Didi, which is backed by Chinese internet giant Tencent, launched a new campaign in late May, offering users of the mobile phone app, who pay fares using the payment service of Tencent’s WeChat online, vouchers for future rides. The move came shortly after Didi and Kuaidi, a rival backed by e-commerce giant Alibaba, ended their similar campaigns which began in January on May 17, the paper said.

On June 11, Kuaidi also launched its own World Cup-themed campaign that offers discounts for future rides to users who take part in a game to correctly predict the results of football matches during the ongoing tournament in Brazil. According to Kuaidi, its latest campaign is aimed at improving users’ familiarity and loyalty to its brand.

Industry sources estimate that the two service providers each spent over one billion yuan (US$160.5 million) during the first four-month campaign, though both Didi and Kuaidi have refused to disclose the exact figures, the paper said.

The money was well spent, however, since several smaller players have been squeezed out of the market, and Kuaidi and Didi have pushed their market shares to 51.6% and 45.3%, respectively, at the end of March, according to an Analysys International report.

Wang Jian, an analyst at Analysys International, said that after burning cash to expand their customer base, the taxi-hailing apps would turn to improving user experience and customer loyalty in order to lower reliance on discounts and other incentives.

Besides targeting customers, Kuaidi recently announced a badminton contest for taxi drivers, which is seen as a move to entice them, the paper said. Meanwhile, industry insiders expect Didi and Kuaidi to explore various options to turn a profit and further differentiate themselves with the resources provided by Tencent and Alibaba.

 

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About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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