Didi downsizes food delivery business in China but mulls launching the same in Latin America to compete with Uber

Despite the downsizing at home Didi continues eyeing lucrative markets, may launch food delivery service in Mexico and Brazil.

Image Credit To Didi Chuxing.

The food delivery business of indebted Chinese ride-hailing platform Didi Chuxing was the first to feel the chill after the company announced a reshuffle last week to save costs and generate new revenue.

Hundreds of layoffs are expected to follow, but some employees have reportedly been shifted to international business departments, KrAsia‘s parent 36Kr learned from sources within the company Tuesday. Didi has confirmed that it will fire a total of about 2,000 employees.

Despite downsizing at home in China, Didi continues to eye possibly lucrative market opportunities and may, in fact, launch food delivery services in Mexico and Brazil, 36Kr‘s sources said. Both countries have large populations and demand for this service.

Uber Eats operates in these countries too. An Uber spokesperson revealed that worldwide, Uber Eats generated US$2.1 billion in gross bookings, representing 17% of Uber’s $12.7 billion in gross bookings in the third quarter of 2018.

Didi started its food delivery business in late 2017 as an experiment to expand its business scope. By July 2018, the company offered food delivery services in 5 cities including Zhengzhou, capital of Central China’s Henan Province.

But it soon stopped its plan to roll out this service to nine more cities and had to manage a big crisis after multiple rape-and-murders occurred in Didi’s car-pooling service.

Editor: Nadine Freischlad