29 May Didi: Freight delivery on the wayBack to Insights
When mobility service meets the platform economy
This April, China’s ride-hailing unicorn Didi quietly registered for a logistic service entity, signalling a soon-to-come letter of challenge to China’s already crowded smart logistics sector by the largest mobility service provider in the country. Substantial moves become visible when the company started recruiting van drivers from Hangzhou and Chengdu last Monday for its intra-city freight delivery pilot project.
Debates are raised around whether Didi’s new service poses a significant threat to China’s freight service provider Huolala. Fabernovel believes that the way to Didi’s victory in this new ‘war’ was paved long before its onset. The rationale is embedded in Didi’s role as a platform — the infrastructure of China’s mobility service.
Didi’s strategic scope is to become a one-stop mobility platform. This ‘one entry, all solutions’ model accelerated the platform’s network effect, gathering a vast amount of users and providers. This infinite scalability lowers the threshold of the success of any new value-added service. The future mobility landscape in China will be composed of multiple services aggregated around a few single infrastructure players.