(Yicai Global) March 7 -- The conflict between Meituan Dianping and Didi Chuxing could be about to escalate as the world’s largest ride-hailing provider enters the meal delivery sector.
Didi Chuxing Technology Co. will roll out delivery services in nine Chinese cities, business magazine Caijing quoted an informed source as saying. The informer didn’t specify when it would the new services would begin, but said Didi would bring on board new merchants and users by lowering commission and offering rewards. The company refused to comment.
The Beijing-based firm announced its plans to enter meal delivery in December, shortly after Meituan revealed it would begin offering ride-hailing services. Seven of the first nine cities Didi will begin delivering food in coincide with areas where Meituan will roll out its ride-hailing services in mid-March.
Didi has dominated the Chinese cab-hailing market since it bought out Uber Inc.’s local unit in 2016, but competition has been heating up as more and more firms look to make their way into the sector, including Meituan, Yidao Yongche and CAR Inc. The rising opposition is likely a key factor in Didi’s decision to branch out into other sectors.
“Didi has defeated competitors with its mass amounts of capital,” an unidentified analyst told the Economic Observer in January. “It has a majority market share, but has not distinguished itself from other companies. Passengers constantly complain about its products and user experience.”