Friday, September 18, 2015

Inside Uber’s Fight With Its Chinese Nemesis, Didi Kuaidi

Inside Uber’s Fight With Its Chinese Nemesis, Didi Kuaidi
China’s huge ride-hailing market has erupted into an all-out brawl



WSJ September 3, 2015

A great emphasis in global marketing is figuring out the ideal ways to prosper in an environment that is foreign. The foreign environment can be beneficial or otherwise hostile towards a new business or venture. This is exactly the case with Uber Technologies that has recently began its expansion in the Chinese markets. One of the hardest uncontrollable influences that Uber has to deal with is the Chinese Didi Kuaidi service that has power and a control of the market that Uber wants to enter into. The article emphasizes the great opportunities of the Chinese market and the potential growth in ride-hailing. This is precisely why there is such a great hope and belief in entering Uber as a competitor in the Chinese markets. This entering is not without a reaction by Didi Kuaidi who also is reacting in the same manner with capital investment and growth. Didi Kuadi is far a greater competitor than Uber with 4,000 employees in 80 cities while Uber currently has 200 employees in only 16 cities so far. On Uber’s side however is technological edge with maps that are more accurate. What is interesting is that both companies have hired cousins from the same prominent Chinese family to aid in the business dealings. This is a great move on Uber’s part as to have a local talent in an uncontrollable foreign market. Uber will have more understanding of the marketplace and culture by having someone who can provide great insight. Hostility has occurred as Uber has speculated that Didi Kuaidi had deleted Uber’s accounts in China’s mobile chat app WeChat. To gain a better position in the foreign market Uber has also made sure to distinguish itself as a separate entity as “UberChina”.


            What is interesting in the battle for the Chinese markets is the fact that private ride-hailing is
illegal” and most drivers of both Uber and Did Kuaidi can be caught and punished by the government and forced to pay fines. Not only does Uber have to compete with Did Kuaidi but also it must compete with the regulations of the foreign government which may in the end determine the success of UberChina. To make matters worse there has begun unrest within the employees of private ride-hailing companies as more applications for phones are making it easier to create fictitious orders and fictitious rides for drivers to then gain compensation and bonuses. This faking then has had repercussions on the real drivers who are left without bonuses and have even had accounts terminated for speculation of hacking which they did not do. It will be very interesting to see the future of UberChina in the Chinese markets as they have to deal with competition, a foreign regulatory government, and the growth of hackers cheating the system. They will have to be very innovative if UberChina is to expand in the Chinese market and gain the popularity of the locals. 

-Katherine Wojtyna (9/18/15)
http://www.wsj.com/articles/inside-ubers-fight-with-its-chinese-nemesis-didi-kuaidi-1441234010

2 comments:

  1. Interesting how Uber is trying to play the "local game" to break into the market.

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