Didi Chuxing, one of China's most popular ride-hailing app, has taken a dramatic hit from the regulator's probe, and the aftermath is brutal — Didi's DAU has fallen by 30 percent. In comparison, its shares have fallen more than 40 percent, according to Financial Times, citing Aurora Mobile.
However, the data might be inconclusive as it only covers the performance of the standalone Didi app and not Didi's mini-app on WeChat.
Details:
According to Aurora Mobile, a Shenzhen-based company researching the behavior of Chinese mobile users, Didi's average DAU(daily active users) fell from 15.6 million in June to 10.9 million in August.
Meanwhile, data from the Ministry of Transport tells a different story — Didi's orders rose 13.1 percent from June to July. Didi's recovery is likely the result of it rolling out a series of promotions since mid-July. For example, a ¥6.6 Didi weekly pass includes discounts and vouchers, amounting to a maximum of ¥110 in value. It is doubtful whether or not throwing coupons at users is a sustainable model, as its rivals are poaching Didi's drivers.
Meituan Dache, a ride-hailing app by food delivery giant Meituan, has gone out of its way to exert its influence on drivers. In Meituan's recent recruiting burst, the company offered perks such as no commission fee for 7 days, 20% pay bumps, and advance payments.
Didi's other competitors are also seizing the opportunity — T3 Chuxing has expanded services in 12 cities within a month, according to LatePost. At the same time, Cao Cao Mobility announced the completion of a 3.8 billion yuan (US$586.2 million) funding round last week.
Context:
Shortly after Didi's US IPO, Chinese authorities have removed 25 of Didi's apps from app stores, forbidding the company from accepting new users. At the same time, the Cyberspace Administration of China launched a data security probe in early July.
According to Financial Times, based on its historical rate of sign-ups, the ban on opening customer accounts is depriving Didi of about 4 million users a month.
There have been no updates from Chinese authorities regarding the probe. At the same time, Didi is busy covering its tracks by writing up patches to close what Chinese regulators called technical loopholes, according to SCMP citing an unnamed Didi staff.
Nevertheless, data security isn't Didi's only weak spot. China's Ministry of Transport requires all ride-hailing apps to conform to three ground rules: platform companies should be licensed, vehicles should be licensed, and drivers should be licensed. According to data from the ministry, just 41 percent of Didi rides were fully compliant in July, while Huaxiaozhu, Didi's budget ride-hailing app, was only 24 percent compliant.