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Didi launches errand service to compete with Meituan and Ele.me

The firm says it can deliver everything from groceries, beverages, medicines, and even flowers.

Image Credit To Didi Chuxing.

China’s largest ride-hailing platform Didi Chuxing has launched a new intra-city errand service in two Chinese cities on Monday, local media LatePost reported.

Didi’s new errand service promises to deliver everything from groceries, beverages, medicines, and even flowers within a city, with a starting rate of RMB 12 (USD 1.72) for the first four kilometers, RMB 20 for a delivery distance of four to 10 kilometers, and RMB 30 for a distance higher than 10 kilometers.

Didi has piloted the service in Chengdu, Sichuan province, and Hangzhou, in Zhejiang, with drivers from the firm’s dedicated service Didi Chauffeur as the first batch of errand runners. The service will be launched in more cities and Didi will start recruiting new employees soon, the firm told KrASIA.

Didi added that its errand service will become an additional income source for Didi Chauffeur’s drivers. Didi’s dedicated driver business, which provides qualified drivers to car owners—often after they have been drinking—has been hit heavily amid the coronavirus outbreak as people are reluctant to go outside or drive their own cars.

As many as 11.4 billion express deliveries were completed in China in 2018, up 23% from the previous year, according to the State Post Bureau, which regulates the country’s postal service provider China Post. That translates to a market worth RMB 90.5 billion (USD 12.7 billion).

Food delivery giants such as Meituan Dianping and Ele.me have already tapped this fast-growing market before Didi. Meituan, China’s largest on-demand services platform, tapped its takeout delivery fleet to offer an intra-city errand service from March 2017. Its main rival, Alibaba’s Ele.me, followed suit a month later.

For intra-city deliveries in Hangzhou, Meituan charges RMB 8 as a starting rate, going up RMB 1 per kilometer within six kilometers, and RMB 2 for deliveries from six to 100 kilometers away. In contrast, Ele.me has a starting rate of RMB 10 in Hangzhou, but did not specify its pricing rules for delivery radius. These companies all have different prices depending on city.

Didi has already tested the waters in China’s on-demand sector. It made a foray into food delivery services in April 2018 with a pilot launch in Wuxi, Jiangsu. However, the company halted domestic food delivery expansion several months later when it had to manage a big crisis after multiple sexual assaults and murders occurred in Didi’s carpooling service.

Recently, the company announced plans to officially launch a food delivery service in Japan starting from April, challenging Uber Eats, the service provided by its main rival in the Japanese market, Uber Technologies, KrASIA reported.