Monopoly in one business vertical used to be what companies were vying for, but now, it seems like established Chinese tech companies want more.
China’s largest ride-hailing company Didi Chuxing and the world’s largest O2O platform Meituan-Dianping declared war with each other after stepping foot on each other’s core business, and both claiming a solid start for their respective new businesses.
On April 9, Didi Chuxing claimed in an open letter that after 8 days since the launch of its pilot in Wuxi, its food delivery service had become the largest in market share there. On the same day, it handled 334k orders.
Five days before the claim, it had already announced it had gobbled up one-third of the takeaway delivery market in the same city and is poised to kick off the service in eight more Chinese cities, including Nanjing, where competitor Meituan-Dianping had first launched its ride-hailing service and ate into Didi’s market share.
Didi Chuxing’s announcement was a retaliation to a similar provocation made by rival Meituan-Dianping, the lifestyle e-commerce major backed by Tencent. On March 24, WANG Xing, founder and CEO of Meituan-Dianping, claimed the company has nabbed over 30% market share in the Shanghai and Nanjing’s ride-hailing market, four days after the service kicked off in Shanghai.
Apart from ride-hailing and food-delivery, the two companies are going head-to-head in bike-sharing as well. Meituan-Dianping hit the headlines several times last week with its acquisition of Mobike, the company part of the duopoly in China’s bike-sharing industry. Didi Chuxing’s ambition in bike-sharing was revealed much earlier. Three months ago, Didi Chuxing’s company came up with a deposit free platform for bike-sharing, giving passengers access to dockless bikes run by its investee Ofo, the beleaguered Bluegogo, and Qingju, Didi Chuxing’s self-owned brand.
The competition between Didi and Meituan is likely to ignite a money-bleeding war. Both companies had already undergone similar wars respectively with Uber and Ele.me. Since Meituan’s launch in Shanghai, Didi has been giving out coupons and subsidies to both passengers and drivers to fight back.
The winner of this on-going competition may have the chance to create a super service app that encompasses most business verticals in a consumer’s life. By then, users may be able to book a movie, hail a taxi to go for the movie, and have snacks delivered to the theatre, all with one app.
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