Didi, China’s answer to the Uber, is not afraid of splashing the cash and continuing to lure customers with generous coupons and discounts to use the ride hailing service.
In an attempt to hang onto its more fickle customers who are notorious for jumping ship as soon as introductory offers of cheap and subsidised rides dry up, Didi launched a budget conscious subsidiary called Huaxiaozhu earlier this year. However, there are now concerns that the budget service is causing Didi to haemorrhage cash and cannibalise its original Didi customer base.
The company executives have come up with a package of strategies to keep costs down and offer cheap rides that rival budget service rival Dida Inc cannot compete.
But market observers have doubts: will this subsidies-reliant business model sustain the company or simply drag it down?
Read the full story on Caixin Global later.
Contact editor Marcus Ryder (marcusryder@caixin.com)
Related:
Car Services Provider Dida Beats Larger Rival Didi to Market
Didi-Controlled Ride-Hailing App 99 Partners With WhatsApp to Offer Service in Brazil
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