What happened: Meituan Dianping, a Chinese group-buying website for consumer products and retail services, received a permit to provide ride-hailing services in Beijing. Licenses were also given to two other businesses, namely Sogood and SH-ABC. This will add to the eight already operating ride-hailing platforms in the city. Meituan launched its mobility service in Nanjing late last year and later expanded to Shanghai.
Why it is important: Dominated by Didi, the ride-hailing industry has become increasingly saturated. Yet, Meituan’s expansion could mark a change in the power dynamic of the industry. As the company ventures to take on Didi in Beijing, there may be a renewed subsidy war between the established firms and the incoming company, resulting in a potential shift in users, whether it be temporary or permanent. Beijing’s attitude is welcoming of a competitive market, particularly given the Chinese government’s investigation into Didi over alleged monopoly allegations.