Top Performers

ByteDance, Xiaomi, and SHEIN lead the list, showcasing the strength of Chinese brands in the entertainment, electronics, and fashion sectors.

Lenovo, Huawei, and AliExpress also remain strong contenders, emphasizing the diversity and innovation in China’s tech and e-commerce industries.

Sector Growth

Smart devices, automobiles, and e-commerce experienced the fastest brand power growth, with China’s industrial ecosystem and technological innovations providing a competitive edge.

Consumer electronics, entertainment apps, and online fashion account for a substantial portion of the brand power growth.

Brand Expansion

Chinese brands have successfully penetrated international markets, with notable growth in regions like Europe, North America, and Southeast Asia.

Brands like BYD and NIO in the automotive sector, and OPPO and Vivo in consumer electronics, have expanded their global footprints, contributing to the increasing brand power.

Market Trends

The report highlights a shift in consumer preferences towards brands that offer meaningful differentiation and high engagement. Brands that have successfully created unique and compelling brand experiences have seen significant growth.

There has been a notable increase in the brand power of mid-sized brands, indicating a shift from the dominance of top-tier brands to a more competitive landscape.

Notable Brand Highlights

• ByteDance: As a global leader in digital content and social media, ByteDance’s platforms like TikTok have become household names worldwide, driving significant brand recognition and engagement.
• Xiaomi: Known for its high-quality yet affordable electronics, Xiaomi continues to expand its product lines and market reach, solidifying its position as a leading global brand.
• SHEIN: The online fashion retailer has disrupted traditional retail with its fast-fashion model, capturing a significant global market share and expanding rapidly across multiple regions.
• BYD: In the automotive sector, BYD’s focus on electric vehicles has positioned it as a key player in the global shift towards sustainable transportation solutions.
• OPPO and Vivo: These smartphone giants have continued to innovate and expand their international presence, offering advanced technology and appealing to a broad consumer base.

Strategic Insights

The report suggests that the key to the success of Chinese global brands lies in their ability to offer meaningful differentiation and engage deeply with consumers. Brands that can innovate and adapt to changing consumer preferences will continue to thrive in the competitive global market.

• Consumer Engagement: Successful brands have invested in understanding and meeting the functional and emotional needs of their consumers, creating strong brand loyalty and advocacy.
• Technological Innovation: Continuous investment in technology and innovation has enabled Chinese brands to stay ahead of the curve, offering cutting-edge products that resonate with global consumers.
• Global Strategy: A tailored approach to international markets, considering local preferences and cultural nuances, has been crucial for the expansion and acceptance of Chinese brands abroad.

Top 50 Brands from Kantar BrandZ 2024 China Global Brands

1. ByteDance
2. Xiaomi
3. SHEIN
4. Lenovo
5. Huawei
6. AliExpress
7. Haier
8. TEMU
9. OPPO
10. Hisense
11. TCL
12. Tencent
13. vivo
14. Chery
15. BYD
16. Anker
17. DJI
18. MiHoYo
19. OnePlus
20. Kuaishou
21. realme
22. GWM
23. TP-LINK
24. HONOR
25. Lynk & Co
26. MAXUS
27. Insta360
28. WORX
29. Lilith
30. Century Games
31. JAC
32. Roborock
33. CHANGAN
34. Geely
35. Midea
36. DiDi
37. POCO
38. ECOVACS
39. Trip.com
40. Magic Tavern
41. Habby
42. Tsingtao Beer
43. EcoFlow
44. Infinix
45. IGG
46. Kunlun
47. eufy
48. 37Games
49. NetEase Games
50. LightInTheBox

BCG: The most innovative Chinese companies

In 2023, China’s ride-hailing companies experienced strong revenue growth and accelerated steps toward commercializing autonomous driving, marking a new phase in the industry’s development.

The sector saw rapid expansion with significant increases in both the number of ride-hailing platforms and order volumes.

By December 31, 2023, a total of 337 ride-hailing companies had obtained operating licenses, up by 39 companies from the previous year. The ride-hailing regulatory information exchange system processed 9.114 billion orders throughout the year, a 30.76% increase from the previous year.

Against this backdrop, ride-hailing companies achieved fast growth in performance. For example, in the first three quarters, Didi’s total revenue increased by 31.2% year-over-year, with its domestic travel and international business growing by 32.8% and 33.9%, respectively.

The commercial operation of autonomous taxis also made steady progress.

Ride-hailing platforms actively deployed commercial autonomous taxi services, offering smart travel solutions.

In August, Baidu Apollo’s autonomous driving service platform “Luobo Kuaipao” was officially launched in Wuhan’s Dongxihu District, providing citizens with autonomous driving services and achieving breakthroughs in cross-district travel and full unmanned night-time operations.

In September, Pony.ai obtained the first unmanned demonstration application license in Shenzhen, covering nearly 150 autonomous driving service stations across many high-frequency travel destinations, operating during peak morning and evening hours.

Technological advancements have shifted market competition from traffic to service quality, propelling the ride-hailing industry into a new stage of development.

China Internet Overview

In the third quarter, DiDi reported total revenues of RMB 51.4 billion, a notable 25.0% increase compared to the same period last year.

This surge is primarily attributed to the strong performance of its China Mobility segment, which brought in revenues of RMB 46.6 billion, marking a 26.6% year-on-year growth. The international segment also showed promising progress with a 27.7% increase in revenue, totaling RMB 2.0 billion.

A critical factor in this growth trajectory is the increase in core platform transactions, which rose by 33.9% year-over-year, reaching 3,579 million transactions. This uptick in user engagement also saw the Gross Transaction Value (GTV) climb by 36.7% to RMB 91.5 billion.

Despite these positive indicators, the company’s financial health presents a nuanced picture. While net income stood at RMB 0.4 billion, with RMB 0.1 billion attributable to ordinary shareholders, the Adjusted EBITA (Non-GAAP) showed a loss of RMB 0.3 billion.

This loss underscores the ongoing challenges DiDi faces in achieving operational profitability, especially in its international and other initiatives segments.

DiDi’s CEO, Mr. Will Wei Cheng, expressed optimism, highlighting the recovery in domestic demand and the company’s strategic focus on core mobility services. He also underscored the commitment to expanding the business and enhancing product capabilities, signaling a confident outlook for the future.

The quarter also saw significant strategic movements, including a focus on marketing and incentives in key international markets like Brazil and Mexico. Additionally, the completion of a transaction involving the sale of certain smart auto business segments to XPeng Inc. reflects DiDi’s strategic refocusing efforts.

As DiDi navigates its way forward, its robust revenue growth and strategic decisions, such as international market investments and business restructuring, are pivotal.

However, the challenge remains in balancing these growth aspirations with achieving profitability, especially in competitive international markets. The company’s next steps will be closely watched as it strives to maintain its momentum in the ever-evolving mobility technology landscape.

Traditional out-of-home advertising showed a downtrend in spending in China. Both real estate and construction industry reduced out-of-home ad spending by 37.1% year-on-year. Xiaomi, Ele.me, KFC, and Didi were among the top ad buyers. 

Xiaomi spent more on out-of-home advertising in July to promote its new model MAX 3 and thus topped the ranking with a high growth of over 1,000% in spending from just 91st a year ago.

Overall, spending on elevator TV advertising increased compared with the previous year. Alcoholic beverage industry saw expenditure skyrocket to 6,917.8%.

Ele.me still was the biggest buyer though its spending reduced by 10.3%. KFC and Mengniu took the next two places by a spending growth at 198.9% and 88.5% respectively. Didi made the highest jump from 61st to 8th with a growth of over 1,000% in spending.

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Check out China advertising market overview; top advertisers in H1 2018 here

Apple and Xiaomi are found most relevant to the lives of China’s Gen-Y and Gen-Z consumers according to RTG Consulting Group.

RTG surveyed 4,000 of China’s Gen-Y and Gen-Z consumers, listing which brands they find most relevant to their lives. Topping the list are well-known brands Apple and Xiaomi, followed by WeChat and Adidas.

Xiaomi tops the list of “most relevant brand” among Gen-Z, while Apple is the favorite among Gen-Y consumers. Fashion brands are more relevant in Gen-Z’s eyes, while the technology category plays a stronger role among China’s Gen-Y.

Other top rankings from the RTG report:

Also read: WeChat monthly active users reached 806 million in Q2 2016

MIT Technology Review lists Baidu as the second smartest company after Amazon in the world.

50 Smartest Companies 2016 picks the 50 companies that best combine innovative technology with an effective business model.

It’s a bit surprising to see a Chinese technology company ranked as the second smartest in the world; according to MIT Technology Review:

Outside its core business of Internet search and ad sales, Baidu is doing notable work on speech recognition and conversational interfaces. In 2015, it announced the development of a speech recognition engine called Deep Speech 2 that uses deep learning to recognize spoken words, sometimes more accurately than a person can. Baidu conducts AI research in part to improve its products and services and better compete with rivals such as Alibaba and Tencent. The company is also aggressively pursuing the autonomous-car market and recently established a team in Silicon Valley to lead research and engineering in computer vision, robotics, and sensors, among other areas.

Other Chinese companies on the top 50 list include Huawei, Tencent, Didi Chuxing, and Alibaba.

50 Smartest Companies 2016

1. Amazon
2. Baidu
3. IIIumina
4. Tesla Motors
5. Aquion Energy
6. Mobileye
7. 23andMe
8. Alphabet
9. Spark Therapeutics
10. Huawei
11. First Solar
12. Nvidia
13. Cellectis
14. Enlitic
15. Facebook
16. SpaceX
17. Toyata
18. Airware
19. IDE Technologies
20. Tencent
21. Didi Chuxing
22. Oxford Nanopore
23. 24M
24. Alibaba
25. Bristol-Myers-Squibb
26. Microsoft
27. Fanuc
28. Sonnen
29. Improbable
30. Movidius
31. Intrexon
32. Carbon
33. Bosch
34. T2 Blosystems
35. Editas Medicine
36. Nestlé
37. RetroSense Therapeutics
38. Line, subsidiary of Naver
39. TransferWise
40. Veritas Genetics
41. FireEye
42. Seven Bridges
43. Slack
44. Coupang
45. IBM
46. Snapchat
47. Africal Internet Group
48. LittleBits
49. Intel
50. Monsanto

Also read: China mobile activities account for 10% of the global

Car-hailing apps have over 60% penetration rate across all city tiers and age groups in China. 84.7% users from China’s first-tier cities  use car-hailing services; and, they used car-hailing apps 8.7 times on average in the past month according to an FT research.

Over 80% users in 25 to 29 age group use car-hailing apps, and they used it as frequently as 9.1 times in the past month according to FT Confidential Research.

Users’ average monthly spend on car-hailing apps is RMB 181. Users whose annual income is at least RMB 300k use car-hailing apps most, 12.5 times on average in the past month, followed by RMB 100k to 299k income group (7.9 times) and RMB 99k or below (6.6 times).

Didi and Uber are two major car-hailing apps in China. 91.3% respondents listed Didi as top 3 car-hailing apps used while only 35% voted for Uber.

Didi ranked top among five most popular car-hailing apps which are Didi Chuxing, Uber, UCAR, Dida Pinche, and Yongche.com.

Didi Zhuanche, private car service by didi, costs lower than UberX, similar service by Uber.

A common tactic adopted by many internet companies in China is to provide subsidies. Didi announced a total number of 1.43 billion orders in 2015 including taxi, private car, carpooling, bus, test drive, corporate service and other services. And, the total number of registered Didi users had reached 250 million by the end of 2015.

Extended reading: Uber’s battle for China (FT.com)

Didi, Uber’s China Rival, announced a total number of 1.43 billion orders in 2015 including taxi, private car, carpooling, bus, test drive, corporate service and other services. And, the total number of registered Didi users had reached 250 million by the end of 2015.

Didi merged with Kuaidi in early 2015. And, its business developed quickly in 2015 which made Didi one of the leaders in the mobile car calling industry in China. The number of Didi’s total orders exceeded 200 million in December 2015.

Year 2015 witnessed an explosive increase in users’ demand for car-hailing services especially in bad weather conditions. Calling requests exceeded 1 million on November 23th 2015 when Beijing had a heavy snow weather, eight times as much as the total number of riding trips in New York on that day.

Allowance of drivers was essential for car calling service providers maintaining a large number of drivers. Uber’s CEO Travis Kalanick told in Beijing that Didi spent US$4 billion on driver allowance every year in early 2016 while it was denied by Didi.

Uber China and Didi led China’s car calling industry in 2015. Uber announced 1 million rides as of December 2015. Under the background of car-purchasing restriction policy of some second and third-tier cities, China mobile car calling market is predicted to remain good in 2016. Didi was valued at over US$6 billion in 2015.

Didi rolled out a public SDK this week that enables third-party apps in China to hail a Didi ride from within their own apps. Didi expected to segment services to make it possible for customers share seats in 2016. Meanwhile, Didi planned to open e-commerce business where customers could buy automobiles on Didi mobile app.

Also read: Trend of China’s Automobile Consumption in 2015

Despite the continuous weak growth and even decline in smartphone sales in China, major domestic mobile phone manufacturers still set a “big leap” of shipping target in H1 2015. Although foreign brands iPhone and Samsung still held a large market share, domestic brands as Huawei, Lenovo, Xiaomi and TCL etc. all set their phone sales volume at 100 million units.

In Q2 2015, Xiaomi was the top smartphone vendor in China by total shipments volume of 15.9%, followed by Huawei (15.7%). Apple ranked third, followed by Samsung and Vivo.

China Mobile, China Telecom and China Unicom, the three Chinese telecommunications companies accounted for 90% of the market.

4G network penetrated quickly into Chinese people’s life while users accessing to the internet through Wi-Fi accounted for 52%, mainly because of the high data charges of 4G network.

25% China mobile internet users on average opened less than 5 apps per day while over 60% would use less than 10 apps. Only 2.9% users would open more than 20 apps in one day. Tencent, Alibaba and Baidu still led China’s mobile internet market.

Among the top 20 mobile apps by total number of monthly average users, seven apps were from by Tencent. And among all the mobile apps in China in July 2015, WeChat and QQ ranked first with the monthly average users of 556.48 million and 424.28 million respectively.

WeChat and QQ were the social communication platforms with the highest penetration rate. Among the usage of the top 20 apps, users spent about 27% of the total apps usage time on WeChat and QQ. Search engine, video, and music player apps were also popular among mobile internet users.

Tencent held a strong position in the mobile social platform. Mobile internet users spent more time on WeChat compared with QQ; however among the post-00s, QQ was the major communication tool.

In the mobile video player market, Tencent, iQIYI and Youku led the market, with fierce competition and little gap of MAU (monthly active users) and total usage.

In the mobile music player market, Kugou music undoubtedly took the lead, followed by QQ Music and Kuwo Music.

Tencent News enjoyed a large share in China’s news apps market while Toutiao was in the process of fast penetration. Toutiao and Tencent News were quite close in total usage time. The daily usage of Toutiao was even twice that of Tencent News .

Offers from China online travel providers such as Ctrip and Qunar have extended to provide more on “things to do” in travel destinations. China online travel providers have also expanded to provide lifestyle offers such as food delivery, movie ticketing and car renting. In H1 2015, Ctrip and Qunar continued the growth momentum, which contributed to the tourism market of China.

Resulting from the convenience of online banking and online payment, mobile online banking apps developed quickly. China Construction Bank ranked first with monthly average usage of 2.32%.

China became the largest e-commerce market since 2014. About 53% users were women in 2015. Taobao held an unaltered position in the online e-commerce market, followed by JD and Vipshop.

In the mother care market, Beibei ranked first with an overwhelming advantage, whose monthly average usage was more the sum of other four apps.

Competition was fierce in the  cross-border hopping market, and Red ranked first in H1 2015 with a market share of 0.19%.

Meituan still ranked top on the group-buying apps in H1 2015, followed by Dianping and Nuomi while Ele continued to compete and was expected to be competitive to Meituan in the monthly average usage.

Meituan and Ele dominate the food delivery market. Ele led the market in Beijing and Shanghai while Meituan held an obvious advantage in other cities. Beijing made up of nearly 10% of the total food delivery share.

Car calling market was basically shared by Didi, Kuaidi and Uber. Although Uber China made much effort in the localization of Uber, the number of daily average users was only one third that of Didi Cars/Kuaidi One.

WeChat payment has gradually been adopted by more users. Many apps supported payments by WeChat. Didi and Meituan were first two apps that used WeChat payment as the primary payment method.

Also read: China Top 100 Mobile Apps in July 2015

Uber China finished nearly US$1 billion financing from Baidu, China Credit Bank, and other large enterprises in China, which made its valuation approximately US$7.5 billion. However, this hasn’t been confirmed by Uber. Uber has also been financing, and the current valuation is about US$51 billion, surpassing the Chinese mobile phone manufacturers Xiaomi to be the world’s highest valuation of private companies.

Currently, Uber business has expanded to more than 300 cities worldwide with growing popularity; and it transports millions of passengers every day. In China, Uber covered 7 cities in July 2014, and it is expected to expand to 40 by the end of this year and 100 by the end of 2016. The total NPV (net present value) of Uber in China Shanghai, Huangzhou, and Shenzhen has been over US$9 billion.

China is an essential market to Uber, which may make up of about one-third of Uber’s total revenue by late 2015. After nearly two years of accumulations, Uber began to increase in monthly total orders and active users; and the growth rates of those are both about four to five times compared to the global market.

Uber utilizes the popularity of smartphones and GPS positioning to provide a platform for car owners and users, and extracts commissions from orders to gain profits. However, in China, private cars who carry for charges without corresponding operational documents would be considered illegal and would be strictly supervised by Chinese transport control department as the “black car”. Thus after entering China, Uber had to cooperate with car rental companies. Major rivals of Uber in China are Didi, Kuaidi, Shenzhou and Yidao. Didi and Kuaidi got a US$2 billion financing after combination with US$15 billion valuation.

During the rapid expansion, the share model is facing global challenges, including China. The company’s business in China has encountered some regulatory resistance and some conflicts with local taxi industry. Problems such as huge losses, excessive car fare subsidies, scalping, fraud transaction, too much reliance on low-cost marketing, loose verification of the driver and vehicle, and so on, are all existing problems faced by Uber. By reducing the allowance of drivers, fraud orders have decreased; however, to maintain continuous growth, Uber is suggested to further localize its management group to win 50% of the Chinese market and keep healthy and reasonable competition.

Also read：China’s Mobile Car Calling Market from 2014 to 2015

Kuaidi and Didi mobile car calling apps still rank first in China’s car calling market by usage rate according to iiMedia Research. Carpooling will become the next focus of competitions in China’s car calling market.

Public transportation is primary transportation in China’s first-tier and second-tier cities when mobile phone users go to work, which accounts for 42.8%. Public transportation system in first and second-tier cities is more sophisticated and less expensive, thus it is the main means to go to work among most mobile phone users.

Brand awareness of Kuaidi ONE and Didi cars lead the market, but China’s mobile phone users’ overall awareness of the car calling mobile commerce has room for improvement. Uber ranks next to Kuaidi and Didi, accounting for 13.0%.

Also read: Baidu’s Global Market Share Decreased to 7.52% in June 2015

In the costly-spending O2O field, almost all firms have a grievous history of fraud transactions and anti-fraud transactions. Uber, Didi, and other vehicle calling services have become the trades favoured by many over the past two years, due to their high-profile spending of scores of millions US dollars every day.

The forms of fraud transactions by Uber, Didi, Kuaidi One and other apps are not so much differentiated. But Uber gives the highest subsidies. So both Uber and his counterparts are fraud transactions on Uber; they also persuade “customers” to click farm on Uber. Only when Didi gives the higher subsidy or during the rush hours will he gets part-timing for it.

This also evidences the recent challenges against Uber’s daily order quantity in China. Travis Kalanick, CEO of Uber, says that the daily order quantity in China is close to 1 million, but the overseas media repeatedly challenge the fake prosperity formed due to Uber’s fake orders.

According to investigations, Uber has gone too far in click farm. The single outlet of Taobao has traded 200,000 Uber passenger accounts. As Taobao orders are mostly made by small and loosely-distributed users, a greater number of users in groups make the deal by making phone calls or QQ messaging. The total fake orders by fraud transactions will be presumably up to 1 million in scale.

Disordered Fraud transactions by Uber

“Get 70 orders a week, and you will earn a bottom line of RMB 7,000. With additional subsidy to new car owners, you can get an easy payment of more than RMB 30,000 a month. ” From this April on, Uber has subsidized car owners to such an extent as even stunning the Chinese costly-spending patriarch Didi.

Also read: 50% China Users Keep Taxi App at the End of Subsidies

In Q1 2015 in China, the top 3 private car service apps were Didi private car (including Yihao private car), Yidao yongche and Uber by total number of active users. EnfoDesk estimates that China private car service will strengthen its service and become the first choice for tier-1 and tier-2 citizens in the near future.

Didi private car (including Yihao private car) ranked the top with 80.9%, followed by Yidao yongche  (17.5%) and Uber (8.1%).

Also read: Business Car Renting Services’ Potential in China

Chinese consumers can save spend when they choose apps that offer subsidies or Hongbao, coupon nowadays. In the internet times, many apps would provide subsidies to acquire users, which further changes people’s lifestyle in China. Tencent carried out a survey about consumers’ long term behavior about apps with subsidies offers and those without subsidies. 50% of respondents will keep taxi app after it stopped offering subsidies in China.

As of 30 September 2014, the number of China taxi app users was 154 million. Didi Taix app’s users exceeded 100 million in 2014. The total subsidies were over RMB1.4 billion(US$227.08 million). Besides, during double 12 (12 December), Didi Taxi app offered RMB130 million and Kuaidi Taxi app poffered RMB180 million in subsidies. At present, the research shows taxi app is the most used app with subsidies.

Take-out apps accounted for 20.8% of all the apps with subsidies in 2015. The competition among take-out apps started in the second half of 2014. The most users were students from colleges according to Tencent’s research in 2014.

Also read: Business Car Renting Services’ Potential in China

As of 30 September 2014, the number of China taxi app users was 154 million. Kuaidi and Didi Dache apps are the two most popular taxi apps in China. Kuaidi had 54.4% market share by total number of users, followed by Didi Dache with 44.9% according to data in report of China taxi app market in Q3 2014 published by EnfoDesk.

The latest data shows as of 30 September 2014, Kuaidi Taxi covered 358 cities in China and Didi Taxi covered 300 in Q3 2014. Kuaidi and Didi Taxi apps users’ average use frequency both increased in Q3 which indicates that user stickiness of their apps is increasing. Active users’ average use frequency of Kuaidi Taxi app was 15.82 while with Didi Taxi app was 12.55.

Tencent backed Didi Dache and Alibaba backed Kuaidi, started a “bonus” war for obtaining users. The battle heated in February 2014, the giveaway bonus for each customer who used their app to call taxi reached 12 yuan (USD 1.94) on February 18, the highest bonus hit 20 yuan (USD 3.24) for customer and 15 yuan (USD 2.43) per transaction for driver. More here.

Taxi apps now provide single taxi service and such apps should be improved to make their long term development.

1. There should be a unified platform for China taxi app market to integrate taxi source efficiently in one city. Taxi apps can expand service like online car renting, car sharing and car booking, which can satisfy uses’ large demand in cities now.
2. Taxi apps should market their service via various social platforms. App users are more dependent on taxi apps when they are in a strange city and it is efficient to market apps on traveling and transportation platforms. Besides, taxi apps can cooperate with local lifestyle service platform to provide discount card and coupon.

eHi and Shenzhou Car Rental Service are two popular car rental service providers in China, see their performance in Q2 2014: China Car Rental Service Performance in Q2 2014: Shenzhen VS eHi

Also read: Business Car Renting Services’ Potential in China

In a survey conducted by Tencent, 17% respondents said it’s convenient for their daily transport with taxi service mobile apps while 45% had no idea about what such mobile app is. Since 26% respondents thought it still needs to improve and many Chinese mobile users are not aware of taxi service mobile app, there is much potential for its development in China.

According to Tencent’s latest survey about business-car renting, 16% respondents considered it cheap to have such service while over half of them never used business-car renting. DiDi Taxi and Kuaidi Taxi are popular taxi apps in China, now they are making efforts on business-car renting.

Uber has been introduced into Shanghai in 2013 and now it provides car service in Shanghai, Beijing, Guangzhou and Shenzhen. AAyongche, another car service providers, will expand its car renting service to 20 cities till end of year 2014.

There are 3 sources of profit for these car service providers: commission, value added service, logistics profit.

However, there are still much concern for development of business-car renting service in China:

1. Since the business-car renting cost consumers a lot, much more than taxi fare, there will be not so many renters at the beginning
2. There are many restrictions for business-car renting in certain cities in China
3. Business-car renting service providers should cooperate with reliable insurance companies.
4. GPS system is indispensable for tracing rented cars.
5. Be careful with competitors in business-car renting market since competition will be fierce.

Also read: Kuaidi Taxi APP Released Its Q1 Financial Performance

Didi Taxi, a popular Chinese taxi-hailing mobile app backed by Tencent, released its data on Wechat Official Account (didi-taxi) on March 31, 2014. By March 27, the bonus for Didi Taxi app hit 1.4 billion yuan (USD 226.81 million), and its registered users increased to 100 million.

Didi began its bonus plan from Jan 10 in 2014, and its covering cities increased from 32 to 178. The number of daily transactions grew from 320,000 to 5.22 million. During the 77 days bonus, the number of users increased from 22 million to 100 million at the cost of 1.4 billion yuan, which means the average cost of attracting a Didi user was about 18 yuan (USD 2.92). Because Didi is bundled with WeChat payment, therefore, WeChat payment users reached also 100 million.

WeChat (Didi) VS Alipay (Kuaidi)

In the past two months, Didi and Kuaidi (backed by Alibaba) started a “bonus” war for attracting users. The battle heated in February, the bonus for each customer reached 12 yuan (USD 1.94) on February 18, the highest bonus hit 20 yuan (USD 3.24) for customer and 15 yuan (USD 2.43) per transaction for driver. Then the bonus began dropping in March, since March 22, the bonus for customer dropped to 5 yuan (USD 0.81) in Beijing, Shanghai, Guangzhou and other six cities, the rest dropped to 3 yuan (USD 0.49).

Didi has spent 1.4 billion yuan, but Kuaidi has not published its data yet. The battle between Didi and Kuaidi taxi apps actually was the battle of WeChat payment and Alipay. Besides support in cash, WeChat also opened API to Didi taxi, Kuaidi also cooperated with Alibaba’s O2O business to strengthen its competitiveness.

As a matter of fact, though the bonus plan seems expensive, subscriber acquisition cost (SAC) was not high at all compared to usual 40 to 50 yuan (USD 6.48 to 8.10). For WeChat, Didi app also helped increasing WeChat payment users and cultivating mobile payment habit.

Problems Caused by Bonus Plan

The bonus plan attracted public attention and participation rapidly, but it also caused many problems such as:

• The taxi drivers became discriminated towards customers, they tended to refuse picking up customers who did not use mobile taxi app Didi or Kuaidi.
• Some customers’ mobile internet connection was poor or they forgot payment password.
• The explosive user growth led to mobile app break down.
• Some drivers would risk violating traffic law to snap the order while driving.

The decreasing bonus certainly affected customers and drivers’ enthusiasm in using taxi-hailing app, they said they would decrease the using frequency but they would continue using it.