FB Pixel no scriptDidi regains momentum with revenue boost in Q1 2024 | KrASIA

Didi regains momentum with revenue boost in Q1 2024

Written by 36Kr English Published on   4 mins read

Didi has strengthened its domestic position by riding the recovery in travel and focusing more on its drivers.

On May 29, Didi Chuxing released its financial report for the first quarter of 2024, which ended on March 31:

  • Didi’s gross transaction value (GTV) for Q1 2024 reached RMB 92.2 billion (USD 12.7 billion), marking a year-on-year increase of 26.9%.
  • Total revenue reached RMB 49.1 billion (USD 6.7 billion), with an adjusted non-GAAP profit of RMB 900 million (USD 124.1 million).
  • Revenue from China’s mobility services remains Didi’s primary income source, totaling RMB 44.5 billion (USD 6.1 billion), reflecting a year-on-year growth of 14.1%.
  • Notably, its international business also performed well, with revenue growing by 43.9% to reach RMB 2.4 billion (USD 331.1 million).

The positive data might be attributed to the ongoing recovery in the travel and mobility market. According to data previously released by Didi, demand for domestic inter-regional travel among Chinese users has been steadily increasing this year, while the volume of overseas rides for Chinese users has also seen significant growth.

From a business perspective, Didi’s platform saw a transaction volume of 3.75 billion rides, a year-on-year increase of 30.3%, while ride volume in international markets grew by 44% to approximately 790 million rides. Additionally, there is an upward trend in average order value.

In response to these results, Cheng Wei, the founder, chairman, and CEO of Didi, noted that the company’s various businesses have achieved steady growth this year, with both domestic and international ride volumes surpassing historical quarterly peaks. Furthermore, data shows that Didi’s stock price has risen by approximately 17% to USD 4.61 per share since the beginning of the year.

Simultaneously, according to Didi’s previously disclosed buyback plan of no more than USD 1 billion, as of May 24, 2024, the company has repurchased a total of approximately 37.1 million American depositary shares as planned, totaling around USD 152.4 million. Between March 1 and May 24, approximately 22.2 million shares were repurchased, totaling around USD 98 million, indicating an increasing buyback effort.

On May 19, Didi issued an internal memo, announcing the appointment of Jean Liu (also known as Liu Qing) as a permanent partner of the company. Liu will no longer serve as a director or president of the company, but her departmental responsibilities remain unchanged. She will continue to serve as the chief people officer of the company, focusing on talent, organizational development, and corporate social responsibility, and will continue to report to Cheng.

Formerly with Goldman Sachs, Jean Liu joined Didi in 2014 and has been widely recognized for orchestrating the merger between Didi and Kuaidi, leveraging her close connections with Tencent and Alibaba. This merger played a pivotal role in cementing Didi’s dominance in the Chinese ride-hailing market. Graphic by KrASIA.

Despite intensifying competition in the domestic ride-hailing market, Didi’s Q1 financial report presents an optimistic and stable growth trend, stemming from the company’s effective shift in its domestic market strategy, transitioning from user acquisition to ensuring stability on the driver side.

As the largest ride-hailing platform in China, Didi has been in operation for 12 years. The company has established a reputation among investors in both primary and secondary markets as an entity that faces occasional setbacks but is capable of winning battles. Although there are aggregators like Gaode Dache and Meituan, as well as ride-hailing platforms like Caocao Chuxing and T3 Chuxing, competing in the market, the fact remains that Didi’s ride volume has remained relatively stable and is difficult to significantly disrupt in the short term.

In recent years, users in the shared mobility industry have also demonstrated strong stickiness and mindset. This implies that the market will ultimately return to a state of rationality, affording leading platforms with both capacity and users the opportunity to maintain a leading edge in scale.

Of note, since Didi introduced more transparency on driver payments in 2021, it has further implemented activities such as commission waivers for new entrants and during holidays, benefiting drivers. Through a series of rewards and encouragement initiatives, Didi aims to support and encourage drivers to work during holidays, alleviating the difficulty of finding rides. At the same time, Didi also helps drivers stabilize their income through initiatives such as new driver income guarantees and off-peak income guarantees.

Starting from June 2023, Didi further strengthened driver-side protection and launched a care plan to enhance the protection of driver rights on its platform. In conjunction with insurance institutions, various protection measures have been introduced, such as pilot driver commercial pension protection, driver family medical and accident protection, as well as direct discounts on car insurance and supporting services such as province insurance packages.

KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Xiao Xi for 36Kr.


Auto loading next article...