Chinese ride-hailing giant Didi Global sees second-quarter revenue rise and losses narrow on strong domestic demand, regulatory easing

Didi Global posted a 52.6 per cent year-on-year jump in second-quarter revenue to US$6.6 billion on the back of strong demand in mainland China
Its net loss narrowed to US$36.4 million in the quarter ended June 30, from US$736 million in the same period last year

Didi Chuxing

Iris Dengin Shenzhen

Published: 8:00pm, 11 Sep 2023

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Chinese ride-hailing giant Didi Global posted a 52.6 per cent jump in revenue and narrowed its losses in the second quarter, as the operator of the world’s largest mobility platform accelerated its recovery after the firm’s main app returned online and new user registrations were resumed in January.

Beijing-based Didi’s revenue reached 48.8 billion yuan (US$6.6 billion) in the quarter ended June 30, up from the 32 billion yuan a year earlier, driven by strong demand at both its core mainland and international operations, the company reported over the weekend.

Its net loss narrowed significantly to 267 million yuan in the second quarter, a 95 per cent improvement from a 5.4 billion yuan loss in the same period last year.

“We plan to engage with our consumers and drivers more actively for the rest of 2023 through effective promotion and more diversified and affordable product offerings,” Didi said.

A car passes through Didi Global’s ride-hailing service parking area along Jichang Road, near the Huizhou Pingtan Airport in the city of Huzhou in southern Guangdong province. Photo: Shutterstock

The company’s China Mobility market segment, which makes up most of Didi’s business, grew revenue 57 per cent year on year to 44.5 billion yuan in the second quarter, when average daily transactions reached 29.4 million.

International operations, primarily focused on major markets Brazil and Mexico, saw revenue rise 35.3 per cent to 1.9 billion yuan in the second quarter.

Didi’s strong performance last quarter showed how it continues to dominate the mainland’s ride-hailing market, despite going through a year-long investigation by the Cyberspace Administration of China (CAC) that concluded when the firm was slapped by regulators with an 8.026 billion yuan fine in July 2022.

The company known as Didi Chuxing angered Beijing when it pushed forward with an initial public offering on the New York Stock Exchange on June 30, 2021 and started trading as Didi Global. As part of Didi’s “rectification” efforts, shareholders voted to delist the company from the NYSE last year.

Chinese ride-hailing giant Didi narrows losses in first quarter

Didi was only able to resume registrations of new users and make its main app available for download again in China in January this year, nearly 18 months after it was ordered to halt customer enrolment in line with the CAC’s investigation.

Didi’s strong quarterly performance comes after Beijing’s post-pandemic economic recovery efforts increased support for the country’s internet sector, from e-commerce to ride-sharing services, according to the latest report by the China Internet Network Information Centre.

Ride hailing was China’s fastest-growing internet market segment in terms of user scale, with 34.92 million new users added in the first half of 2023, according to the report.

The total number of internet users nationwide reached 1.08 billion as of June, an increase of 11.09 million from December last year, to put the nation’s online penetration rate at 76.4 per cent.

Chinese ride-hailing firm Didi Global sells its EV unit to Xpeng

Didi is also expected to sharpen its focus on its ride-hailing business after it agreed to sell its electric vehicle (EV) arm to car maker Xpeng in exchange for shares worth HK$5.84 billion, exiting a once-promising new business that is now crowded with 200-odd players.

Xpeng will issue shares at HK$64.03 apiece to pay for the asset, and Didi will own 3.25 per cent of Xpeng’s enlarged capital.

Didi’s EV plans can be traced back to 2016, when it created an autonomous driving unit. That unit was spun off as an independent company in 2019, with a team of more than 250 engineers tasked to develop self-driving technology.

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