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Price Wars! Meituan Takes on the Mighty Didi in Nanjing

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“Mei niu? Which APP did you use to book my car?” Considering it a rather odd question, I answered that Didi Chuxing was the APP I had used. “You should start using Meituan, the price is really cheap and much better”, suggested the driver.

So the next time I booked a car, I gave it a go. The Meituan interface works in a similar way to Didi, just as accurate if not more so. And to boot, yes, it was much cheaper, set at ¥2 for the next two rides, until the price returned to match Didi’s, which is always set at around ¥5.

So to me I didn’t think that much of it. To me, it’s just another car hailing competitor to Didi that really didn’t rock my world my in the first place. However, to the world of business and tech, this is hot news. After obtaining permission from the local authorities, Meituan launched its car hailing service in Nanjing in December of 2017 and announced plans to enter Beijing and Shanghai.

A Meituan source said, “As Didi begins to profit by charging a higher commission from drivers, we stand to gain public favour”, reported Meng Jing and Sarah Dai for the South China Morning Post (SCMP). “The company’s private valuation of US$30 billion puts it behind Uber, Didi Chuxing and Xiaomi, and ahead of Airbnb, as the world’s fourth most valuable unicorn, according to venture capital research firm CB Insights”, the article states.

Didi Chuxing Chief Executive, Cheng Wei, reportedly told the press that “[Didi] have PK’ed countless rivals”, meanwhile “Meituan is reportedly offering drivers low commission fees and high bonuses to entice them over to its app, and incentives to lure consumers are set to follow, according to Zhao”, reported the SCMP.

According to Emma Lee, writing for Technode, “Meituan also leveraged subsidies, the most effective way to secure users in a field where Didi Chuxing dominates. Under its rule, the first 200k passenger registers can get ride coupons and first the 50k (Beijing) or 20k (Shanghai) drivers can enjoy commission free service”.

However, as reported by this publication in January, the many drivers coming from elsewhere in Jiangsu for a slice of the Didi pie has put users off; local drivers do at least know where they are going. If they can crack this problem, Meituan stands a good chance in Nanjing.

Since this story was first published, Didi have already hit back, with rides this morning (Sat. 10th March) available for just ¥1, pictured above.

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