China’s two biggest Internet companies, Alibaba and Tencent, have called a truce in their six-month war to capture customers for their respective taxi-hailing apps. Total cost: more than 2 billion renminbi ($325 million), the Financial Times reported.
The two sides have cut back in their spending since June after battling to a stalemate, with each app — Alibaba-owned Kuadi Dache (“swift taxi”) and Tencent-owned Didi Dache (“honk honk taxi”) — claiming about half the Chinese market, said Wang Jian, an e-commerce expert at Beijing-based Analysys International. As of June 30, Didi Dache has a market share of 45.6 percent and works in 178 cities, while Kuadi Dache has 53.6 percent and is in 306 cities.
But before that, both companies lavished incentives on cab drivers, with some reportedly receiving Rmb100 ($16) to pick up a fare, five times the going rate for a ride. Getting a taxi in Beijing became nearly impossible without using a smartphone app, while Shanghai banned taxi-hailing apps during rush hour starting in March. Both apps also paid riders a subsidy of Rmb10 ($1.60) per taxi ride.
For all the money spent, neither side managed to convincingly win. Kuadi Dache is slightly ahead, according to Analysys International data. But Didi Dache spokesperson Zhou Li called the data a “distortion” and claimed it now has 68 percent of the market.
Meanwhile, the war is moving upscale. San Francisco-based Uber launched its car-hailing service in Beijing in July, after debuting in Shanghai, Guangzhou and Shenzhen earlier in the year. In response, Kuadi Dache said it will buy a fleet of BMW 5-series and Audi A6 sedans to complement its taxi-hailing app.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More