Shulou(Shulou.com)06/03 Report--

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Liu Qing, president of Didi, joined the board of directors of Guccimei on June 17 and officially became the new board member of Kering Group, according to the Beijing Business Daily. Recently, Didi has successively spread the news of community e-commerce and freight transport.

Since the beginning of this year, Didi has first entered the business of running errands, and now it is moving into the freight and e-commerce industries. The reason behind Didi's frequent multi-field testing is that it is gradually facing the ceiling in the field of travel and its losses have not been resolved. According to Ai media consulting data, Didi has occupied more than 60% of the market share in the online ride-hailing market, and it is difficult to achieve a bigger breakthrough.

In addition, Didi has been losing money for a long time since its establishment in 2015, and it has been difficult to make a significant improvement in its business. After the stewardess incident in 2018, Didi's losses got worse.

It is speculated that Didi's entry into the freight and community e-commerce market will help Didi improve its travel and life service ecology on the one hand, and reverse the long-term loss of its travel business on the other. In reality, these voices seem reasonable, but they can't stand up to scrutiny and verification.

Not to mention whether Didi's new business can be profitable, but in terms of the tightness of its business, the span from e-commerce to freight is too large. In addition, from the perspective of current new business expansion, in today's increasingly expensive traffic, Didi's new business will inevitably fight a price war in which subsidies are exchanged for the market. If it goes on like this, it is inevitable that the loss will expand again.

From freight to e-commerce, Didi fancy layout

On June 16, Didi announced that it would start its first operations in Chengdu and Hangzhou on June 23. The relevant official said that the selection of Chengdu and Hangzhou this time was based on users' votes in the "Kaesong refueling" event and the situation of more than 20,000 drivers.

On the same day, Juming.com reported that Didi launched a community e-commerce business called "Orange Heart Optimization" in Chengdu, focusing on time-limited second-kill products that are lower than the market price, including fresh fruit, food and beverages, and kitchen utensils. This marks that Didi's tentacles have extended to the e-commerce field.

This is not the first time Didi has expanded its business in other areas. After the acquisition of Uber China in 2015, Didi firmly held a "big brother" position in the ride-hailing market, but Didi's ambitions were not satisfied.

In 2018, Didi began to enter the takeout industry to compete head-on with Meituan. After the takeout business was launched, Didi successively launched its business layout in new energy, smart driving and other areas. In March this year, Didi's errand business was officially launched and officially entered the local service.

This fancy diversified business development, we can really see Didi's anxiety. Behind Didi's frequent business expansion, it is inseparable from the ceiling of Didi's ride-hailing business.

Didi was forced to open up territory because of the disadvantage at home.

In recent years, the number of users in the domestic ride-hailing market is still growing, but the growth rate has slowed down significantly. According to the Statistical report on the Development of the Internet in China, the number of ride-hailing users increased by only 0.3% in June 2019 and December 2018.

In addition, the 2020 epidemic has had a great impact on the ride-hailing market, where traffic is already at its peak. At the peak of the epidemic, 95% of the ride-hailing drivers were unable to operate normally, which in turn triggered the driver to apply for a return to the online ride-hailing service company.

When the main business is disadvantageous, Didi is forced to make internal adjustments. Under the influence of multiple measures such as internal salary adjustment and option allocation, Didi's ride-hailing business has finally made a profit, but its business has only returned to 60% of its previous period.

Didi has taken 63% of the ride-hailing market. Its rivals, Shenzhou Premier car and Cao Cao, have been working in the market for many years, and it is difficult for Didi to compete with them for market segments, so Didi has turned its attention to industries with higher market potential.

And this time to enter the e-commerce, freight industry, Didi is also working on its own abacus. At present, the penetration of the freight market is generally low, and Didi has the flow and technical advantages of ride-hailing business, which is even better in terms of penetration capacity. In the community e-commerce industry, Didi launched a limited second-kill subsidy activity, while making use of its own traffic advantage to attract a large number of users.

But in the e-commerce and freight industries, Didi faces a much stronger competitor. Didi's business in these two areas will also be difficult to move forward quickly if it does not learn the lessons of previous takeout failures.

Can new business solve old problems?

On March 6, 2018, Didi takeout business was officially launched and put into operation in nine cities, including Wuxi, Nanjing and Xiamen.

In the field of takeout, Didi still uses the subsidized operation of the ride-hailing business. In order to compete for the market, Didi launched the "one cent to eat fried chicken, one cent to drink milk tea" campaign, and the takeout orders in Wuxi exceeded 334000 on the first day of the activity.

The raging subsidies ended after an interview with the Wuxi government, resulting in a sharp drop in Didi takeout orders. After that, Didi platform cancelled the rewards and subsidies, the number of users plummeted, and Didi takeout began to decline.

Didi suffered heavy losses when it entered the takeout. According to detailed statistics, the amount of Didi subsidies exceeded 6 million on April 9, 2018 alone. And Didi this test of e-commerce, freight business, is likely to follow the old path of subsidies before.

Under the high subsidies, Didi is bound to face the dilemma of long-term losses, which will inevitably put a lot of pressure on its newly profitable travel business, while Didi has lost more than 50 billion yuan since its inception. Under such circumstances, Didi continues to expand its business and is bound to continue to increase its problems.

If Didi's layout in the e-commerce and freight industry still follows the old path of food delivery subsidies, Didi's losses will only be more serious, and its dilemma of reaching the ceiling of the ride-hailing market will not be alleviated in any way.

Can diversity really break the game?

From online ride-hailing to freight transportation and community e-commerce, Didi is improving its ecological layout step by step. Analyst Zhang Yi mentioned that Didi's layout in many aspects is to improve the areas from people as the core, cars and bicycles as carriers, to freight transportation and life.

In the ecological layout of Didi, freight transportation takes the car as the carrier, which broadens the online car-hailing business. The community e-commerce business is to make use of the flow of online ride-hailing business to open up the market in the field of life services.

On the one hand, the profit of the core business of ride-hailing can support the diversified business development of Didi; on the other hand, community e-commerce and freight will also feed the ride-hailing business, forming a virtuous circle.

But this is only the ideal situation of Didi.

Meituan's diversification is to take its takeout business as the core, expanding into wine, travel, movies and other life services. By contrast, Didi's diversified industries span too much and are not closely related. Freight business can also form a system ecology with online ride-hailing, but community e-commerce and takeout businesses are difficult to connect, and there is little coordination between these services.

In the community e-commerce and freight industry, Didi this novice is bound to face a lot of challenges. In the freight market, freight lesbians and fast dogs have already occupied more than 78% of the market share. Didi is bound to face great pressure to compete with these competitors. In the community e-commerce market, although the consumer demand increases sharply under the epidemic, the competition is becoming more and more fierce.

In enterprise operation, the expansion of new business already needs a lot of capital, and Didi's simultaneous development to two areas is bound to make losses continue to expand, and new business profit is also a long-term process.

In addition, Didi is likely to use subsidies in new business areas in exchange for the market, its operating pressure is bound to continue to increase. Therefore, if Didi wants to make money by diversifying its business, it also needs to do a good job in basic skills and real fine management.

(official account of Liu Kuang / tr. by Phil Newell) ID:liukuang110

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