Alibaba And Tencent Do Surprising Merger For Taxi Services
Two of China’s most dominant taxi-hailing apps are merging to expand their services. According to the Reuters, Didi Dache and Kuaidi Dache will be amalgamated to create a smartphone-based transport service which will be the largest of its kind, not only in China but also across the world.
When these two Chinese leading taxi-hailing apps will merge, their estimated value will be approximately $6 billion, a source reveals to Reuters.
However, this most topical merger has still many ambiguities down the surface. Above all stands the question: Will they work under the same brand name and same execs or there will be other way around? Considering explanation from the companies, they will function under the separate brand names with different execs. Weir Cheng who is chief of Didi, and Kuaidi Boss Dexter Chuanwei Lu would hold the offices as co-chief executives — later seems more applicable.
The businesses will be launched formally after the Lunar New Year, the companies further said.
It is important to mention that Didi is owned by Chinese e-commerce giant Alibaba while Kuaidi is in possession of Tencent Holdings Ltd., and both Alibaba and Tencent are grave rivals in business. Both the groups have been in massive conflicts for the past year.
Both have been, at least apparently, gobbling everything in their expedients to dominate one another in the vast Chinese market. On the course of such expedient, it is almost inevitable to pay the price. And both the companies did pay the price in the form of huge losses.
According to a study by Analysis International done in December, Alibaba’s Didi was holding almost 55 percent market share, while Tencent’s Kuaidi claimed ownership of the remaining 45 percent of the market stakes.
Didi and Kuaidi have chiefly been competing in the transport sector – to corner one another from the transport market. The reason is obvious: China has world’s largest transport market where more than 150 million people use taxi-hailing via their smartphones, say analysts.
Although this combination of Alibaba and Tencent have taken many folks by surprise, the teamwork is capable to serve people in an upgraded way.
“Supportive of this merger as it will promote the healthy development of the taxi-app and expand city travel options for users,” an Alibaba spokeswoman said.