A battle between the world's top two ride-hailing service providers is set to break out in Latin America following Didi Chuxing's announcement on Thursday of a partnership with Brazil's leading shared mobility provider.
The Chinese car-hailing service leader made a strategic investment in Brazil's homegrown 99, formerly known as 99Taxis, and will take a seat on 99's board of directors.
"China and Brazil are the world's foremost emerging markets with enormous opportunities for our rideshare industry," Cheng Wei, founder and CEO of Didi, said in a press release sent to the Global Times Thursday.
Brazil, which has the world's fifth-largest population, is already crucial turf for multinational ride-hailing companies including Uber of the US, which entered the market in 2014. In June last year, its app had already been used by 66 percent of Brazilian Internet users, according to a survey by Miami-based consulting firm eCMetrics.
Uber seems to be very appealing to foreign visitors who do not know Portuguese. "Local apps like 99 offer services in Portuguese, which is not very tourist-friendly," a Chinese tourist who declined to be identified told the Global Times Thursday. The young man visited Rio de Janeiro in August 2016.
He said Didi still has a chance to stand out despite its late start in the market because it can better woo Chinese tourists.
Brazil's Tourism Ministry said in a statement that the country received more than 53,000 Chinese tourists in 2015 and expected further rises in that figure, the Xinhua News Agency reported in late December 2016. The ministry authorized 316 travel agencies, up 5 percent from 2015, to receive more Chinese tourists this year.
Didi's Brazilian entry is a test for broader involvement in Latin America, said analysts.
Didi said in the press release that it will provide guidance and support in areas including technology, product development, operations and business planning as 99 continues to expand across Brazil and the rest of the Latin American market.
Uber also has a firm foothold in other Latin American countries. Mexico is reportedly the world's third-largest market for Uber.
"Different from Uber, Didi's overseas expansion is based on strategic investment in local partners, which can guarantee less operating risk," Wang Chenxi, an industry analyst with Beijing-based market research firm Analysys International, told the Global Times Thursday.
The Brazilian company offers on-demand private car and taxi-hailing services in 550 cities in Brazil, and it leads the market in Sao Paulo, Rio de Janeiro and other first-tier cities, the announcement said. It has more than 140,000 registered drivers, and its app has been downloaded more than 10 million times.
Didi's move in Brazil is just part of its globalization strategy, in which the Chinese company, backed by Apple Inc and Tencent Holdings, has already made great strides over the past two years.
In 2015, Didi signed cooperation agreements with Indian peer Ola, GrabTaxi in Southeast Asia and Lyft in the US to form a global service alliance.
In April 2016, the Chinese player announced plans to drive into the US, home base of Uber, thanks to its partnership with Lyft.
Wang said that Didi is speeding up its overseas expansion, as it is being constrained by strict government regulations back at its home market.
Local government authorities, especially big cities like Beijing and Shanghai, tightened control over the ride-hailing services late in 2016, issuing new rules such as requiring cars to be locally registered and service providers to only hire local residents as drivers.
Apart from expansion beyond China, Didi is also seeking opportunities in other ventures including car rental and online bus-booking services. According to media reports, its car rental services became available abroad from Wednesday.
(Source: Global Times)
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