Chinese ride-hailing giant Didi on Wednesday said it will shut down its food delivery service in Japan on May 25, Nikkei Asia reported.
“Unfortunately, due to local market conditions, we have made the difficult decision to discontinue Didi Food in Japan from 25 May 2022 and will focus on our taxi-hailing services in the country,” the company said.
Most of Didi Food Japan’s roughly 200 employees will be laid off at the end of May, according to a LinkedIn post by the company’s recruiting manager.
Citing people familiar with the matter, the news outlet said that Didi’s food-delivery unit in Japan lacks the support of SoftBank, the heavyweight investor of Didi Group. While SoftBank backed Didi's ride-hailing service, it has given up on injecting money in Didi's food-delivery arm in Japan since it’s already an investor in Uber there, the report said.
Last week, the trouble-ridden said an extraordinary general meeting will be held on May 23 to vote on its delisting plan, adding that it will delist its shares in the US before applying to list on an alternate exchange.
Didi has been intensively monitored by Chinese authorities since it went public in the US in mid-2021. Shortly after its IPO, the cybersecurity regulator initiated a probe and forced it to remove its apps from domestic app stores. The agency was later said to have asked DiDi’s top executives to devise a plan to delist because of concern sensitive data may leak.
Last December, Didi is reportedly seeking 'listing by introduction' on Hong Kong Stock Exchange. Unlike typical IPOs, companies listing stock by introduction in Hong Kong raise no capital and issue no new shares. In Didi's case, the mechanism will allow it to list shares in Hong Kong without raising capital or issuing new stock as it seeks to delist from New York.
However, the plan did not go as expected. On March 11, Reuters reported that the ride-hailing giant had suspended preparations for "listing by introduction" due to its failure to meet China's conditions on handling sensitive user data.
Since listing in the US, Didi’s stock price dropped 90%.