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China’s Didi Chuxing continues its international expansion with Australia launch

China’s Didi Chuxing continues its international expansion with Australia launch

Didi Chuxing, China’s dominant ride-hailing company, is continuing its international expansion after it announced plans to launch in Australia this month.

The company — which bought Uber’s China business in 2016 — said it will begin serving customers in Melbourne from June 25 following a month-long trial period in Geelong, a neighboring city that’s 75km away. The business will be run by a Didi subsidiary in Australia and it plans to offer “a series of welcome packages to both drivers and riders” — aka discounts and promotions, no doubt. It began signing up drivers on June 1, the company added.

The Australia launch will again put Didi in direct competition with Uber, but that is becoming increasingly common, and also Ola which counts Didi as an investor — more on that below. This move follows forays into Taiwan, Mexico and Brazil this year as Didi has finally expanded beyond its China-based empire.

Didi raised $4 billion in December to develop AI, general technology and to fund international expansion and it has taken a variety of routes to doing the latter. This Australia launch is organic, with Didi developing its own team, while in Taiwan it has used a franchise model and it went into Brazil via acquisition, snapping up local Uber-rival 99 at a valuation of $1 billion.

It is also set to enter Japan where it has teamed up with investor SoftBank on a joint-venture.

“In 2018, Didi will continue to cultivate markets in Latin America, Australia and Japan. We are confident a combination of world-class transportation AI technology and deep local expertise will bring a better experience to overseas markets,” the company added in a statement.

This international expansion has also brought a new level of confusion since Didi has cultivated relationships with other ride-hailing companies across the world while also expanding its own presence internationally.

The Uber deal brought with it a stock swap — turning Didi and Uber from competitors into stakeholders — and the Chinese company has also backed Grab in Southeast Asia, Lyft in the U.S., Ola in India, Careem in the Middle East and — most recentlyTaxify, which covers Europe and Africa.

In the case of Australia, Didi will come up against both Uber and Ola, with the India firm currently present in Melbourne, Perth and Sydney via an expansion made earlier this year. Uber vs Didi is to be expected — that’s a complicated relationship — but in taking on Ola (so soon after it came to Australia), Didi is competing directly with a company that it funded via an investment deal for the first time.

That might be a small insight into Didi’s relationship with Ola. Unlike Grab, which has seen Didi follow-on its investments, the Chinese firm sat out Ola’s most recent fundraising last year despite making an investment in the company back in 2015.

Ola declined to comment. Didi did not immediately respond to a request for comment on its new rivalry with Ola Down Under.

The move into Australia comes at a time when Didi is under intense pressure following the death of a passenger uses its ‘Hitch’ service last month.

The company suspended the Hitch service — which allows groups people who are headed in the same direction together — and removed a number of features while limiting its operations to day-time only. This week, it said it would resume night-time rides but only for drivers picking up passengers of the sex.

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