China’s massive ride-hailing platform Didi Chuxing has introduced home delivery options to its app in two major cities amid the Covid-19 outbreak which has weighed heavily on its core mobility businesses.
Why it matters: As many Chinese citizens remain home-bound, Didi’s push into home delivery could expand the company’s existing revenue streams and offset the impact of the pandemic on its disrupted ride-hailing business.
- Didi’s daily active user base shrank 54% during the Spring Festival holiday from more than 15 million early January, recent figures from Chinese research firm Aurora Mobile showed.
- The number of daily rides on Didi Express, the company’s standard-level ride-hailing service, sank by more than four-fifths sequentially in some major Chinese second-tier cities in February, Chinese media reported citing company insiders.
Details: Didi has quietly launched earlier this week a home delivery service, “Paotui,” a word which means running errands. The service is active for dwellers in the southwestern Chinese city of Chengdu as well as Hangzhou, capital city of eastern Hangzhou province, Chinese media LatePost reported.
- Unlike food delivery services, Didi users can request couriers to run errands for more general door-to-door tasks from picking up laundry to delivering groceries, according to a TechNode reporter’s observations on Wednesday.
- Didi will typically charge users between RMB 12 and RMB 20 (around $1.70 to $2.90) within a distance of 10 kilometers (around six miles). An errand request which exceeds 10 kilometers will cost more than RMB 30.
- The company on Wednesday confirmed to TechNode that professional chauffeurs from its Designated Driver business are currently offering the service and it plans to roll out the trial business nationwide, though it did not reveal further details.
- The company’s Designated Driving service which offers chauffeurs to safely bring users home in their own vehicles, is reportedly one of the company’s few profit-making businesses other than its struggling carpool service. The Designated Driving service has a daily order volume of 380,000 on average, although it has been hit hard due to the coronavirus outbreak.
- A designated driver could earn around RMB 4,000 a month offering home delivery services, according to the LatePost report, which may help offset lost income from Didi’s ride-hailing services, and help the platform with driver retention rates.
Context: Didi made its first foray into the lifestyle services market with the launch of its food delivery service in a number of Chinese cities in March, 2018, partly a preemptive measure against Meituan which began trial operations of its ride-hailing services in early 2017.
- Didi put a halt to the business in China a year later, after two female passengers were killed by drivers on its platform in separate incidents in mid-2018. The company reportedly incurred an annual loss of RMB 11 billion for the year, and announced a 2,000 job cuts early last year.
- The Toyota and Soft Bank-backed ride-hailing platform is on track to launch food delivery service in Japan starting April, Reuters reported citing a representative.