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Jingdong's Ambition to Challenge Didi in the the Ride-Hailing Market

2018-09-25 13:22 Tuesday

Although Jingdongs CEO Richard Liu has been in the public eye for the wrong reasons, his personal scandal has not interrupted Jingdong's ambitious plans to expand its company profile.

Ride-Hailing Market

Jingdong's logistics subsidiary, Jiangsu Jingdong Information Technology Company, has changed its business scope and related materials to encompass ride-hailing, a development that signals its intention to diversify and grow.

China's ride-hailing market started to take off in 2015, with a 71.4% growth in the number of users from 2015 to 2016. Despite slowing growth, the number of users in 2017 topped 236 million, and is expected to surpass 280 million in 2018.

After years of development, the ride-hailing market has reached relative equilibrium. Ride-hailing apps have achieved a market penetration of 16.9%, with Didi dominating the market at a 13.83% penetration rate, followed by Shenzhou's 1.38%, Yidao's 0.33% and Shouqi’s 0.23%

Meituan got a head start on Jingdong by launching its online ride-hailing business in March, 2018. Meituan was initially successful in cities such as Shanghai and Nanjing by offering abundant discount promotions. However, these practices were later banned by the authorities for disrupting fair market competition.To avoid similar pitfalls, Jingdong should exercise caution to ensure that it doesn't run afoul of regulators when entering the market.

Furthermore, two murder cases involving drivers on the Didi platform, have been met with public outrage, have jeopardized its accumulated gains on the ride-hailing market. Nonetheless, it remains unclear if Jingdong’s entry can challenge Didi’s market dominance and restore consumer confidence.

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