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Didi to shut food delivery business in Japan

Written by Nikkei Asia Published on   2 mins read

Majority of 200 employees to be laid off, two years after entry into market.

Chinese ride-hailing company Didi Global is shutting down its food delivery business in Japan, the latest sign of retreat as it prepares for a delisting in the United States.

Didi Food Japan, the subsidiary running the food delivery service, on Wednesday said it will shut down the business on May 25. It launched the business in April 2020 in Osaka and has since expanded to nine prefectures, according to its website.

“Unfortunately, due to local market conditions, we have made the difficult decision to discontinue Didi Food in Japan from 25 May 2022 and will focus on our taxi-hailing services in the country,” the company said.

Most of Didi Food’s roughly 200 employees will be laid off at the end of May, according to a LinkedIn post by the company’s recruiting manager. The taxi-hailing service is run by a separate company, Didi Mobility Japan.

The move is a sign that Didi, once China’s dominant ride-hailing company, is scaling back its global ambitions after a decision to push ahead with a US listing last year triggered a backlash from Chinese regulators. Its stock price has declined by nearly 90% since its trading debut. The company is set to hold a shareholders meeting in May to vote on its delisting plans in the U.S.

Didi is following in the footsteps of Foodpanda, a food delivery brand run by Germany-based Delivery Hero, which said in December that it will sell the Japanese unit. Japan’s online food delivery industry expanded during the COVID-19 pandemic, but companies have been burning cash to acquire users.

A person familiar with Didi’s food delivery business cited a lack of support from SoftBank Group, a major Didi shareholder, as a reason for its struggle in Japan. SoftBank has set up joint ventures with several Vision Fund portfolio companies, including Didi for its taxi business, in Japan to help localize their services. But it did not invest in Didi Food because it is a backer of Uber Technologies of the US, which is a leading food delivery player in Japan, the person said.

This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.


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