Didi Expands Instant Delivery Service to Recover from Loss Caused by Coronavirus
Coronavirus severely affected Didi’s most profitable designated driver. The instant delivery service’s labor mainly consists of these drivers.
Didi launched instant delivery services in Chengdu and Hangzhou on March 10, with the aim to reduce the impact caused by the coronavirus on its business. The objective is to provide convenient services for clients and to retain drivers on its platform through delivery income.
Didi's advantage lies in the platform's traffic and the C-side driver group, as well as an opportunity to enter the instant service industry, which has attracted big players such as Meituan and JD. Startups including UU Paotui are also keenly competing for a market share in this growing industry.
Checks on Didi's App page revealed the types of goods purchased include coffee, vegetables, and medicine among others. The pricing is 12 yuan for 4 kilometers, 4 yuan for 10 kilometers, 20 yuan for 10 kilometers, and 30 yuan for 10 kilometers or more.
As a leading player in China's transportation industry, Didi's business trajectory has expanded to more countries and industries with the recent being Panama, the sixth country on March 10. It has plans to start a food delivery service in Japanese cities Osaka and Tokyo starting from early April.
Its international expansion story dates back to 2016 when it merged with Uber China. It has since then invested in transportation companies in India, Brazil, Middle East, North Africa and Europe. Going global is not the only strategy Didi relies on, it has also invested in new energy company, Orange energy, AI company Ditu technology and finance project 'Yijiu fu.'
While Didi's business forecast looks ambitious, it announced a loss of CNY 10.9 billion (USD 1.57 billion) in 2018 and the current epidemic has made the situation worse. Even though China is recovering and work is resuming across board, the situation is not stable yet.
Data gathered from Baidu map indicates that, on the first day of construction in 2020, national driving and navigation trips fell 86.7% compared to the same period in 2019. Besides the virus, Didi has made some losses from bad investments, with the biggest being its investment of USD 370 million in the bicycle sharing company ofo.
Didi's business expansion covers many areas, just like other companies in Internet and e-commerce. Based on their existing strength, they compete for more customers and potential profitable points.