Their Business Faced Roadblocks, So Didi is Now Mirroring Alibaba’s Fintech Game Planby Fintech News Hong Kong January 3, 2019
The company that drove Uber out of China, Didi Chuxing, comes into the new year embroiled in controversy. About a month ago, Didi announced a major restructuring—the latest development in series of platform tweaks after it came out that the platform’s features had a hand in two separate passenger murder cases.
The incidents have also caused regulators to descend upon the ride-hailing service with concerns for safety, as both instances highlighted some gaps in Didi’s driver management and authentication procedures.
These security troubles follow a wide scale collapse of the bicycle-sharing industry, with ofo, a company that Didi hedged some huge financial bets on, falling the hardest of all due to poor planning and internal troubles among its higher ups.
It’s not as if Didi Chuxing is on its last legs, but current trends do not bode well for the giant.
Now, Didi Chuxing is Putting Full Force into Its Fintech Setup
Didi Chuxing set up its financial business group in early 2018 and has been testing its products within that period. Following that quiet period, Didi unveiled the rollout of two financial products available in-app: car loans and personal insurance.
Didi’s goal is to provide personal financial products in an era of new economy and flexible employment.
Asia Times reports that the web version offers some additional services, including fund-raising for serious illnesses, health insurance, wealth management and auto insurance. The fundraising side of their offerings seem to mimic the crowdfunding model, though it doesn’t seem to be a financial product.
Meanwhile, the other offerings on the Didi platform will be provided by licensed financial institutions, like banks, insurance companies and consumer finance firms.
With its ride-hailing service at its core, Didi stated that its future expansions into fintech will be designed to meet the financial demands of both drivers and passengers.
They conducted trials in 10 Chinese cities including Chongqing and Zhengzhou, but will see a nationwide rollout this week.
Didi’s move into the financial services space means that the company will stand up to established players like Ant Financial, the fintech arm of the Alibaba Group which became a force to be reckoned with following its successful Alipay e-wallet.
Didi already had fintech in its vision before its not-so-stellar 2018, but one has to wonder if these plans had been expedited somewhat following crisis in its core business. At this venture, launching complementary financial services to its ride-hailing side could help bolster its core business. However, we can’t help wondering if Didi plans to stay on this path, or use it as a stepping stone for expansion into its own separate fintech arm.
If the latter is the case, then Didi Chuxing will have to step out of a zone it has mastery in into the shark-infested waters of the fintech industry in China, filled with competition ready to crush it.
Featured image via Didi Chuxing