Ride-hailing platform Didi Chuxing is piloting a new grocery e-commerce project in Chengdu as it looks to diversify its revenue streams.

Why it matters: The e-commerce pilot is Didi’s latest push to expand beyond its core ride-hailing business, which has been hit hard by the Covid-19 epidemic.

  • Grocery e-commerce was one of the few business segments that saw strong demand during the coronavirus outbreak.
  • Entering the market means the company will be competing in a cutthroat industry against grocery delivery giants ranging from Meituan to JD Daojia.

Details: Chengxin Youxuan is a fresh produce and grocery “community e-commerce platform” for shoppers who live within a certain vicinity of one another, local media reported.

  • Users can access the service through a WeChat mini-program, which offers flash sales of daily groceries and basic supplies including vegetables, fruits, paper products, and snacks.
  • Without a courier fleet, the service only supports next-day pick-up at nearby offline stores, putting it at a disadvantage compared with grocery delivery rivals.
  • Didi is operating the service through partnerships with third-party warehouses and stores.
  • The service is currently active for residents in Chengdu, which has lower operating costs and less competition compared with megacities like Beijing and Shanghai.
  • The company on Tuesday confirmed to TechNode that the project is under small-scale pilot testing, calling it “one of Didi’s new efforts to address the new demand of users in the post-Covid-19 era.”

Context: The company in March launched home delivery service “Paotui,” where users can request couriers to run errands, from picking up laundry to delivering groceries.

  • Didi is also began hiring van drivers in May in two provincial capitals as part of an early-stage move into the logistics industry.
  • The “community e-commerce” concept isn’t new but gained traction during the Covid-19 lockdown.
  • The company sells to shoppers who live within the same communities to save on distribution costs, helping to keep prices low. Shoppers can also band together for group buys.

Emma Lee (Li Xin) was TechNode's e-commerce and new retail reporter until June 2022, when she moved to Sixth Tone to cover technology and consumption. Get in touch with her via lixin@sixthtone.com or Twitter.