China's Ride-Hailing Market Rebounded in July Amid Easing Covid-19 Restrictions
Lu Hanzhi
DATE:  Aug 17 2022
/ SOURCE:  Yicai
China's Ride-Hailing Market Rebounded in July Amid Easing Covid-19 Restrictions China's Ride-Hailing Market Rebounded in July Amid Easing Covid-19 Restrictions

(Yicai Global) Aug. 17 -- China's ride-hailing sector recovered in July from June amid loosening Covid-19 travel restrictions.

Residents completed 695 million trips last month, a 9 percent increase from June or an almost 11 percent decline from a year ago, the ride-sharing watchdog announced yesterday.

Nine out of 10 top ride-hailing platforms logged an uptick in orders last month, except for automaker SAIC Motor’s Xiangdao Chuxing. The growth rates of Xiehua Chuxing, T3 Chuxing, Meituan Dache, and Shouqi Limousine & Chauffeur all exceeded 10 percent.

Didi Chuxing is still China's biggest ride-hailing platform. The company's market share has remained around 70 percent in the past six months, according to a report by Haitong Securities. It dropped by 10 percentage points to 69 percent in May from July 2021.

Other service providers take what is left after the dominating player, Didi Chuxing, said Chen Liteng, analyst at think tank portal

Investors are optimistic about the sector. Xiangdao Chuxing, which is planning an initial public offering, announced on Aug. 15 that it raised over CNY1 billion (USD147.7 million) via its Series B round of funding, participated by SAIC Motor and autonomous driving technology firm Momenta. Xiangdao’s valuation reached USD1 billion after the fundraiser.

For the first time, the regulator revealed data from platforms that search trips on multiple service providers. These include AutoNavi, the operator of Amap mobile application, telecoms equipment giant Huawei Technologies, and Tencent Holdings’ instant messaging app WeChat. They completed a total of 153 million orders in July.

Huawei and WeChat are newcomers in ride-hailing as both of them entered the sector this year to increase user traffic. Last month, the phonemaker launched Pedal Chuxing in the four cities of Beijing, Shenzhen, Nanjing, and Hangzhou. WeChat recently opened its ride-hailing function, linked to Caocao Chuxing, Shouqi Limousine & Chauffeur, and Yangguang Chuxing in Beijing.

The model of content aggregation has lower operating costs, said Chen. Service providers that have low user traffic choose to partner with such platforms to receive more orders. But they will end up "working for others" if they cannot convert users into regular clients, the analyst added.

Editors: Shi Yi, Emmi Laine, Xiao Yi

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Keywords:   Car-Hailing Service