A mobile taxi app has taken China by storm
|
"Which one of you texted for a cab?" Image: Didi Taxi, a wildly popular taxi-hailing app, released official data showing users had increased by more than 1m per day between January 10th and March 27th. Volumes soared from 22m users to 100m.
The staggering results were shared across WeChat, a popular instant messaging service owned by Didi Taxi’s backer, Tencent.
The messaging service used an attractive incentives scheme beginning on January 10th, inttroduced across 178 cities. The scheme rewarded new users with “bonuses” for signing up, which were converted into discounts applied to the original fare. Didi estimates the combined cost of the scheme at 1.4bn yuan ($350m or 18 yuan ($2.92) per new user.
During the period, competition with Alibaba’s Kuaidi app led to a costly bonus war between the two online giants. In February, Kuaidi hit a peak of 20 yuan ($3.24) per customer.
While the generous subsidies have clearly helped boost subscriptions, the long-term sustainability of such plans is clearly questionable. Without financial incentives, fickle consumers may lose interest and resort to old-fashioned taxi hailing.
With more than 5m taxi journeys being booked every single day in April, however, it appears that Didi's strategy of buying its way into market dominance is working.
Nevertheless, using online services like Alipay and WeChat payment, the two companies are convincing the public of the benefits of mobile payments, which will ultimately lead to greater transaction revenues for both in the long run.