Didi Chuxing expands to the UAE with joint venture
The UAE-China Economic Forum that started on Monday in Beijing, saw China’s ride-hailing app, Didi Chuxing, sign an agreement to expand to the Middle East, by setting up base in Abu Dhabi. It will do so through forming a joint venture with Symphony Investment along with other investment institutions in the region.
The joint venture comes in addition to the signing of 16 MoUs and a Strategic Framework Agreement between ADNOC and CNOOC during the Forum, as China and UAE forge a stronger relationship between the economies.
Coming back to the investors with whom Didi Chuxing is cementing its Middle East expansion, Symphony Investment is majorly funded by Mohamed Alabbar, Chairman of Emaar Properties, a Dubai-based property developer that is one of the world’s most valuable and admired real estate development companies.
"The investment institutions will actively partner up with leading Chinese technology companies to leverage their respective strengths, facilitate resource sharing and bring new technology and operational advantages to stimulate economic growth in the region.”
Didi also announced that Mudabala Investment—the Abu Dhabi based investment company who contributed $15 billion to SoftBank’s 100 billion Vision Fund—was considering to become an investor in its Middle East expansion.
Didi Chuxing is backed by SoftBank, the investment powerhouse based in Japan, who also has investments in Uber and Ola, as well as had investments in Brazil's 99.
Hailing from China, Didi Chuxing is now an international ride-hailing giant that has entered multiple markets including Australia, Japan, and Canada, along with Brazil with its acquisition of 99, as well as recently in Chile and Colombia.
One of the most interesting aspects to note regarding Didi Chuxing is that has invested in seven other ride-sharing companies, including Uber, Careem, Grab, Lyft and Ola.
This indicates that while it is profiting from its own company, it is also benefitting from its international competitors operating in different regions.
Given recent news, we can draw a parallel between two Asian ride-hailing companies, Didi Chuxing and Ola, which hails from India. Ola recently expanded to open Ola Labs in Silicon Valley to explore the possibility of driverless cars—two years after Didi opened its own research and development centre for self-driving cars in Mountain View, California.
Since Uber’s acquisition of Careem, we believe the market is open to competition to prevent monopoly of the market by Uber. We are curious how Didi will change the status quo. Should Swvl start planning for competition from China’s Didi in the future? Given that the details of Didi’s expansion to the UAE and the Middle East are yet to be disclosed, we’ll be keeping a watch on how MENA’s ride-hailing market evolves.