1. News
November 11, 2021

Didi does delivery (again), deigns not to call it Didi Dining

By Elles Houweling

Chinese ride-hailing app, Didi Chuxing, is attempting to make a comeback after a state-led investigation saw the company lose US$15bn in market value. This time, the brand is looking to spread its reach into the food delivery industry.

According to Chinese news outlet TechWeb, Didi is trialling a food delivery service in Tianjin, a city next to Beijing, called “Aoao dining”. The move aims to revive the company’s delivery service, formerly called “Manzu Gaifan”, which was launched in 2020.

“Aoao Dining” was piloted around several universities in Tianjin in 2020 and has now been rolled out across the city at large. According to the Chinese report, the service currently features over 30 partners. Users can access the platform and order food through the social media super app, WeChat.

A way in which “Aoao Dining” hopes to compete with other delivery apps is by providing delivery for free. Right now, the market is dominated by Meituan and Alibaba-owned Ele.me.

It is worth noting that Didi first attempted to break into the food delivery market in 2017 with its Didi Food app. However, due to the fierce competition in a sector largely dominated by Meituan, Didi gave up its effort in this area to instead focus on ride-hailing. In 2019 it shut its domestic business, but Didi Food still exists in several foreign markets, including Japan, Mexico, Costa Rica and Colombia.

In June, Didi Chuxing went public on the New York Stock Exchange, raising a whopping $4.4bn. However, its glory was short-lived. A mere three days after its initial public offering (IPO), the Cyberspace Administration of China (CAC) – the country’s main internet watchdog – launched an investigation into the platform, citing illegal collection of user data.

Soon after, the app was removed from Chinese app stores, and the company’s shares took a nosedive, causing Didi to lose about US$15bn of market value a few days after its debut.

The probe into Didi was hardly the CAC’s only move. Following the ride-hailing giant’s failed US listing, Chinese regulators rolled out a slew of new laws aimed to rein in the power of big tech companies. One primary goal was to keep Chinese companies from listing in the US.

Food delivery services were not spared either in Beijing’s crackdown. Last month, Meituan was fined U$533m for engaging in anticompetitive behaviour.

According to GlobalData’s scorecard, Didi Chuxing scores particularly well in areas such as social media and the sharing economy. However, it lags when it comes to ESG and regulation.