Honestly, I'm not surprised. 滴滴出行 is throwing a lot of money at buying people. I downloaded the app in case I can't get a cab in Beijing, and they keep bombarding me with "15RMB voucher", "50RMB voucher", "50RMB voucher", "25RMB voucher" just to get me to start using the app.
Regular cabs are cheap and plentiful over here. I can go from here to Sanlitun for about 150RMB, which is about 30km. Within 4th ring road, flagging one down (outside of rush hour) is trivial. Public transportation is cheap as well (1RMB for a bus ride, 3-10RMB for a subway ride all over the city). That means that neither Uber nor Didi are competing on convenience, they're competing on price till they've got the market cornered.
And every app over here does it. Wechat pay got themselves advertising spots during the New Years Festival Broadcast last year and has been offering discounts EVERYWHERE last November. McDonalds, Subway, Paris Baguette, literally everywhere. This year Alipay got to sponsor the New Years Festival Broadcast, so they're in catchup mode right now.
Uber may have used the strategy first, but they're late to the party in China. As a foreign company in China, they should have positioned themselves as a premium provider. Look at what Apple did. It's a thing of beauty how obsessed Chinese people are over their iPhones.
So how would Uber have gone about that? Offer premium rides first. Nice climate controlled cars with properly screened chauffeurs. Aim for the people that aren't quite able to afford a full-time driver. Didi can be nicer than cabs, but it's a little hit or miss sometimes. Remove that ambiguity.
Open up an Uber store in Sanlitun. Does an Uber store make sense? No, but then a lot of things do not make any sense here in china, and they still work somehow. Nice modern store, a fancy car somewhere on display, and what would it sell? Gift rides and vouchers. Exploit the Chinese habit of giving gifts and regifting(you can buy fruit in boxes for Chinese new year, why not Uber rides in boxes?), and go wild with it. Wooden box with a red sleeve, containing a scale model of a car with minimal uber branding, some assorted status object and then a red envelope that folds open to reveal an Uber voucher in the X000RMB range, or some fancier rides you can't book through the app (eg. armoured cars/vintage cars/sports cars/helicopters/etc.). In a sense, Didi is already doing some of these.
The point is, if you're trying to get into the Chinese market, don't get into mudfights with Chinese competitors. They'll fight dirty, and if you fight dirty, they'll fight dirtier. Apple didn't come out with a discount phone to beat Xiaomi (which btw, fights REALLY dirty. They sell to distributors ABOVE MRSP to cut their margins. the distributors have to put up with it).
No, go premium, and come early. There's an entire part of the Chinese tech industry that calls itself C2C - Copy 2 China. The moment your startup hits techcrunch, there'll be a Chinese copy of it. That is a law of nature. It will happen to you.
Uber should have known this before throwing down the gauntlet over here. It's not going to be a fun ride for 'em.
Regular cabs are cheap and plentiful over here. I can go from here to Sanlitun for about 150RMB, which is about 30km. Within 4th ring road, flagging one down (outside of rush hour) is trivial. Public transportation is cheap as well (1RMB for a bus ride, 3-10RMB for a subway ride all over the city). That means that neither Uber nor Didi are competing on convenience, they're competing on price till they've got the market cornered.
And every app over here does it. Wechat pay got themselves advertising spots during the New Years Festival Broadcast last year and has been offering discounts EVERYWHERE last November. McDonalds, Subway, Paris Baguette, literally everywhere. This year Alipay got to sponsor the New Years Festival Broadcast, so they're in catchup mode right now.
Uber may have used the strategy first, but they're late to the party in China. As a foreign company in China, they should have positioned themselves as a premium provider. Look at what Apple did. It's a thing of beauty how obsessed Chinese people are over their iPhones.
So how would Uber have gone about that? Offer premium rides first. Nice climate controlled cars with properly screened chauffeurs. Aim for the people that aren't quite able to afford a full-time driver. Didi can be nicer than cabs, but it's a little hit or miss sometimes. Remove that ambiguity.
Open up an Uber store in Sanlitun. Does an Uber store make sense? No, but then a lot of things do not make any sense here in china, and they still work somehow. Nice modern store, a fancy car somewhere on display, and what would it sell? Gift rides and vouchers. Exploit the Chinese habit of giving gifts and regifting(you can buy fruit in boxes for Chinese new year, why not Uber rides in boxes?), and go wild with it. Wooden box with a red sleeve, containing a scale model of a car with minimal uber branding, some assorted status object and then a red envelope that folds open to reveal an Uber voucher in the X000RMB range, or some fancier rides you can't book through the app (eg. armoured cars/vintage cars/sports cars/helicopters/etc.). In a sense, Didi is already doing some of these.
The point is, if you're trying to get into the Chinese market, don't get into mudfights with Chinese competitors. They'll fight dirty, and if you fight dirty, they'll fight dirtier. Apple didn't come out with a discount phone to beat Xiaomi (which btw, fights REALLY dirty. They sell to distributors ABOVE MRSP to cut their margins. the distributors have to put up with it).
No, go premium, and come early. There's an entire part of the Chinese tech industry that calls itself C2C - Copy 2 China. The moment your startup hits techcrunch, there'll be a Chinese copy of it. That is a law of nature. It will happen to you.
Uber should have known this before throwing down the gauntlet over here. It's not going to be a fun ride for 'em.