Produced by | Pai Finance
Wen | Xin Youji edited | Pai Gongzi
Didi, who was locked up in a small black room, finally saw the light of day in 2023.
On January 16, Didi Chuxing's official Weibo announced that over the past year, our company has seriously cooperated with the national network security review, taken seriously the security problems found in the review, and carried out comprehensive rectification. With the consent of the Cybersecurity Review Office, new user registration of "Didi Chuxing" will be resumed from now on. In the future, the company will take effective measures to effectively ensure the security of platform facilities and the security of big data, and maintain national network security.
This marks that Didi has finally gained a breather after being severely punished by regulators for a year and a half in July 2021. However, the ride-hailing market is different from the past, during the period of Didi's "absence", part of the market share has been eroded by friendly businessmen, old shareholders have lost doubts about life, and new businesses have been affected and unable to move forward... However, looking back at the Didi incident that is not a long time ago, an impulse has made it pay its due price, and although Didi faces changes after the lifting of the ban, the opportunity remains.
01. Risky listing and regulatory action
Things have to start with Didi's low-key listing in the United States. There was no bell ringing, no publicity, on June 30, 2021, Didi Chuxing quietly logged on the US stocks, and the reason given by Didi was: "Listing is not the end, but the beginning of a new journey".
However, just two days after the listing, a "Announcement of the Cybersecurity Review Office on Initiating a Cybersecurity Review of Didi Chuxing" blocked Didi's new journey. The announcement said that a cybersecurity review will be implemented for Didi Chuxing, during which Didi Chuxing will stop new user registration.
On the evening of July 7, 2021, Didi's official website removed the Didi Chuxing App and could not be downloaded at all.
In order to prevent the recurrence of such incidents, on July 10, 2021, a new policy on strengthening the supervision of Chinese concept stocks and improving the security management related to foreign listings was introduced, which requires operators with more than 1 million users' personal information to file for cybersecurity review when going public abroad.
Subsequently, 26 apps such as Didi's "Didi Chuxing" were removed. Half a month later, the CAC, together with seven departments, including the Ministry of Public Security, the Ministry of State Security, the Ministry of Natural Resources, the Ministry of Transport, the State Administration of Taxation, and the State Administration for Market Regulation, entered Didi to review network security.
On July 21, 2022, in accordance with the Cybersecurity Law and other laws and regulations, the Cyberspace Administration of China fined Didi RMB 8.026 billion, and Cheng Wei, chairman and CEO of Didi Global Co., Ltd., and Liu Qing, president of Didi Global Co., Ltd., each fined RMB 1 million. Some insiders explained that the supervision of this boot has finally landed.
In response to a reporter's question, the relevant person in charge of the Cyberspace Administration of China said that it has been found that Didi Coexisting in 16 illegal facts, including illegally collecting screenshot information from users' mobile phone albums, storing driver's ID number information in plain text, analyzing passengers' travel intention information without clearly informing passengers, and failing to accurately and clearly explain 19 personal information processing purposes such as user device information.
According to data from Analysys, the monthly active users of the Didi APP fell from more than 60 million in July 2021 to about 30 million in December last year. Another industry statistic shows that one year after the Didi APP was removed, the number of active drivers on the platform also lost nearly 10 million.
However, this situation is not all caused by rectification, the epidemic and the economic downturn are also one of the key factors affecting the number of Didi drivers and the monthly activity of the platform.
02. Didi lost 563 days
In the 563 days that Didi was locked up, the ride-hailing rivers and lakes set off a new bloody storm.
After the news of Didi's punishment was announced, ride-hailing players who had coveted the market cake for a long time quickly moved and vowed to snatch a piece of meat from Didi, including old rivals Meituan, Gaode, Cao Cao, T3, as well as new players Tencent, Huawei and Douyin.
The first to start the action was T3 Mobility. In a disclosed internal letter, T3 Mobility executives said that "the window period left by the market for us is only 40 days" and asked the internal department to start to come up with the consciousness of "007". In order to seize this window period, T3 Mobility has set an internal plan since July 2021, indicating that it will open 15 cities in a row, with a target of exceeding one million daily orders, and firmly establish the second position of China's online ride-hailing.
In addition to conventional means such as pulling new red envelopes and driver subsidies, T3 Mobility also makes efforts to double micro-shake, Xiaohongshu and other social media crazy Amway, "Serving People's Travel" series of advertisements to dominate the screen focus elevator media, the purpose is to occupy more market share in a short window period as much as possible.
The effect of "internal mobilization" was felt in August 2021. The average daily order volume of T3 Travel in August was about 1.2 million to 1.5 million, while the average daily order volume of the platform at the end of 2020 was only 700,000 to 800,000. According to internal data, T3 Mobility aims to increase the average daily order volume of the entire business to 3 million by the end of 2021, and expand its business scope to 48 cities across the country.
During the summer vacation of 2021, AutoNavi took the lead in announcing the launch of the "Summer Commission-free Season", cooperating with more than 100 ride-hailing platforms to attract customers through high subsidies. Meituan Taxi has revived in place, recruiting drivers on a large scale in more than 30 cities including Beijing, Shanghai and Nanjing.
Not only that, the capital market is also surging, in September 2021, Cao Cao Mobility announced a financing of 3.8 billion yuan; A month later, T3 Mobility, backed by FAW, Tencent, Alibaba, Suning and other giants, completed a series A financing of 7.7 billion yuan, which is the largest financing for a domestic ride-hailing company in 18 years.
At almost the same time, Hello Mobility also completed the financing contract, investing in well-known Internet companies such as Ant Group and Alibaba, involving an amount of about 1.9 billion yuan; Guangzhou Automobile Industry Group, the controlling shareholder, invested CNY 350 million, and its subsidiary Ruqi Mobility also raised approximately CNY 1 billion.
In 2021 alone, there were 16 financing events in the ride-hailing industry, with a financing amount of more than RMB12 billion.
When major platforms seized the time window to quickly promote the ride-hailing business, Didi quickly felt the pressure and began to provide preferential operations such as subsidies to existing users, but the market was inevitably occupied by rivals. According to media reports, in July 2019, Didi's domestic daily order volume was about 24 million, AutoNavi had a daily order volume of 700,000, and Meituan was 40~500,000 orders; In August 2021, Didi's average daily unit volume was about 20 million, Gaode was about 5 million, and Meituan was about 1.2 million.
At the same time, Tencent, which has always been seen as a source of Didi's traffic, is also beginning to consider other options. In July 2021, after Didi was ordered to be taken down, many users noticed that WeChat's Didi mini program quietly disappeared; A month later, WeChat adjusted the entrance of Ruqi Travel Mini Program to a conspicuous position in the nine-square grid in the form of "limited-time promotion".
Soon after, the Didi mini program reappeared in the nine-square grid. But at the same time, Tencent began to increase its aggregation of ride-hailing, and began to go out of the Greater Bay Area in March 2022, covering more than 100 cities across the country as of July of that year.
Also entering the ride-hailing market are Douyin and Huawei, where in December last year, the application for the opening of Douyin's transportation category Mini Program attracted attention, and T3 Mobility and others entered successively; Huawei, on the other hand, entered the online car hailing game more for the consideration of selling cars and improving the petal map. But in either case, Didi's traffic diversion will become a sure thing.
03. Didi Win still exists
However, Didi is not all bad news.
According to data from many institutions such as Analysys, after Didi Chuxing's market share fell from the highest 90% to 70%, it seems to have entered a long period of stability. No matter how much competitors increase their concessions, it seems increasingly difficult to take the food from Didi Chuxing.
Didi's financial report shows that in the third quarter of 2021, Didi's domestic travel orders were 2.36 billion, a decrease of 210 million from 2.57 billion in the second quarter, and an average daily decrease of 2.33 million. In other words, in the 2 or 3 months that other travel players spent money to acquire customers, they only shared Didi's market share of 2.33 million orders every day, while Didi's daily order volume was 25.61 million, an order of magnitude higher.
In the fourth quarter of 2021, the number of orders taken by competitors was also decreasing. Didi's domestic travel orders in the fourth quarter were 2.307 billion, down 49 million from the third quarter, with an average of 530,000 per day, while Didi's daily order volume was 25.08 million.
This is also reflected in the subsidy policies of competitors. In 2022, T3 Mobility said that the focus of competition in the ride-hailing industry has shifted from a price war dominated by burning money subsidies to a battle over operating models dominated by safety compliance and high-quality experience, suggesting that the platform will not continue to burn money for growth.
At the same time, since April 2022, Cao Cao has cancelled the commission rebate policy and charged drivers 20% of turnover as commission. Many platforms such as Meituan taxi and Rujiu travel have reduced or even directly canceled the morning and evening peak order receiving subsidies.
But on the other hand, Didi has an absolute advantage in terms of overall strength and user cognition, if Didi wants to regain market share from other players, it only needs to take this opportunity to start a subsidy war, after all, as of the end of 2021, the total amount of cash, cash equivalents and restricted cash on Didi's books is still 43.98 billion yuan, even after paying a fine of 8 billion yuan, Didi still has enough ammunition.
On the whole, during the one-and-a-half-year rectification period, although Didi paid huge fines, suffered serious damage to its reputation, new users could not register, and old users who replaced computers naturally evaporated, at the same time, the ride-hailing business of Tencent, Huawei and Douyin has also begun to harvest traffic in the market, but the new and old opponents have not yet caused fatal damage to Didi.
After this reformed rectification, Didi, which has reappeared, will usher in an opportunity to turn over against the wind, and the window period for new and old opponents may also be closed.