On-de­mand apps branch out into lend­ing and health in­sur­ance

China Daily - - BUSINESS - By OUYANG SHIJIA ouyang­shi­jia@chi­nadaily.com.cn

Chi­nese ride-hail­ing gi­ant Didi Chux­ing has rolled out a suite of fi­nan­cial and in­sur­ance ser­vices in its mo­bile app, as its tries to di­ver­sify its of­fer­ings and gen­er­ate new streams of rev­enue.

The move came af­ter a com­pa­ny­wide re­or­ga­ni­za­tion in De­cem­ber, which aims to im­prove safety and ef­fi­ciency, as its core busi­ness is un­der in­creas­ing scru­tiny from au­thor­i­ties.

New prod­ucts in­clude health in­sur­ance, credit and lend­ing, wealth man­age­ment and auto-fi­nanc­ing ser­vices.

“On the whole, fi­nan­cial ser­vices are ex­pected to help Didi build a stronger net­work of col­lab­o­ra­tion and shared in­ter­ests, and in turn, a tighter and more ef­fi­cient trans­porta­tion ecosys­tem,” the firm said in a state­ment.

On its auto fi­nanc­ing so­lu­tions, Didi said its fi­nance arm will work with its new au­toso­lu­tions busi­ness to “ex­pand a qual­ity sup­ply base for China’s vi­brant mo­bil­ity mar­ket by cre­at­ing ef­fec­tive links be­tween top­tier driv­ers and part­ners and a high­qual­ity sup­ply of new en­ergy ve­hi­cles, through com­pet­i­tive and re­li­able pur­chas­ing, leas­ing, trad­ing and fi­nanc­ing ser­vices”.

Prior to their na­tion­wide launch, the in-app ser­vices were tested in 10 cities in­clud­ing Chongqing, Zhengzhou in He­nan prov­ince and Foshan in Guangdong prov­ince.

Zhao Yiyang, a se­nior re­searcher at the Sun­ing In­sti­tute of Fi­nance, called the move a crit­i­cal step for Didi to gain new earn­ings via fi­nan­cial of­fer­ings, which may help off­set losses from its core ride-hail­ing busi­ness.

In Septem­ber 2018, Didi’s founder and CEO Cheng Wei said in an in­ter­nal let­ter to em­ploy­ees the com­pany has not turned a profit dur­ing re­cent years, and suf­fered a net loss of 4 bil­lion yuan ($582 mil­lion) in the first half of 2018 alone.

As well as hav­ing fi­nan­cial prob­lems, the firm has also at­tracted con­cern over its safety record.

In 2018, two fe­male pas­sen­gers were killed in sep­a­rate in­ci­dents in­volv­ing Didi driv­ers, thrust­ing the is­sue of its se­cu­rity checks into the spot­light. Both pas­sen­gers were us­ing its Hitch ser­vice, an in­ner-city car­pool­ing ser­vice.

In late Novem­ber, the Min­istry of Trans­port said Hitch, which re­port­edly is Didi’s only prof­itable ser­vice, would re­main off­line un­til it cor­rected its safety prob­lems, mak­ing it even more dif­fi­cult for Didi to drive into a prof­itable fu­ture.

In early 2018, Didi of­fi­cially launched a fi­nan­cial ser­vice unit to of­fer di­ver­si­fied fi­nan­cial prod­ucts for pas­sen­gers, driv­ers, car-own­ers as well as its busi­ness part­ners. Cur­rently, it has ob­tained fi­nan­cial li­censes in pay­ments, on­line small loans, fi­nan­cial leas­ing, fac­tor­ing and in­sur­ance.

Cur­rently, Didi of­fers a full range of app-based trans­porta­tion op­tions for 550 mil­lion users, in­clud­ing taxi, ex­press, pre­mier, bus, des­ig­nated driv­ing, bike shar­ing and car shar­ing, fer­ried around by more than 31 mil­lion driv­ers.

“Didi has a solid, huge user base foun­da­tion, as ride-hail­ing is one among many high-fre­quency and just needed daily ap­pli­ca­tion sce­nar­ios,” Zhao added. “As the largest ride-hail­ing com­pany in China, Didi will be able to pro­vide a wide range of fi­nan­cial of­fer­ings cov­er­ing the pur­chase of cars, af­ter-sales sup­port, re­pair, main­te­nance, rental ser­vices and con­sump­tion.”

Thanks to its huge data­base, Zhao said, Didi could use big data to “an­a­lyze pas­sen­gers’ be­hav­iors and rate their credit” to lessen its risk.

Ac­cord­ing to Zhao, Didi has more ad­van­tages in pro­vid­ing fi­nan­cial ser­vices for driv­ers, as the com­pany is able to col­lect rel­a­tively com­pre­hen­sive in­for­ma­tion from driv­ers, such as on­line checks on a driver’s qual­i­fi­ca­tions or back­ground, and off­line be­hav­ior mon­i­tor­ing.

Didi is just one of a num­ber of lead­ing Chi­nese tech­nol­ogy and in­ter­net com­pa­nies look­ing to tap the in­ter­net fi­nance sec­tor, and el­bow their way to new prof­its in a crowded mar­ket­place.

Meituan-Dian­ping, China’s largest on-de­mand ser­vice provider, said in Novem­ber it has been cleared to is­sue 5 bil­lion yuan of as­set-backed se­cu­ri­ties. The funds will be used to pro­vide more small and mi­cro loans for mer­chants, the com­pany claimed.

While pop­u­lar news ag­gre­ga­tion app Jinri Toutiao, owned by Bei­jing Bytedance Tech­nol­ogy Co Ltd, also de­vel­oped a fi­nan­cial busi­ness last year to pro­vide con­sumers per­sonal loan ser­vices.

Xue Hongyan, di­rec­tor of the in­ter­net fi­nance re­search cen­ter at Sun­ing In­sti­tute of Fi­nance, stressed there is an emerg­ing wave of pop­u­lar in­ter­net plat­forms tap­ping into the fi­nance sec­tor.

“To­day, users will spend a large amount of time on mo­bile so­cial plat­forms, on­line videos, mo­bile games and news sites. Mean­while it is re­ally dif­fi­cult for fi­nan­cial ser­vices plat­forms to at­tract users to spend time on them,” Xue noted in the in­sti­tute’s of­fi­cial WeChat ac­count. “The co­op­er­a­tion of the two sides will help op­ti­mize the al­lo­ca­tion of their re­sources. For in­ter­net plat­forms, it will help of­fer bet­ter user ex­pe­ri­ences as well as gen­er­ate new rev­enues.”

Didi will be able to pro­vide a wide range of fi­nan­cial of­fer­ings cov­er­ing pur­chase of cars, af­ter sales sup­port, re­pair, main­te­nance, rental ser­vices and con­sump­tion.” Zhao Yiyang, a se­nior re­searcher at the Sun­ing In­sti­tute of Fi­nance

PRO­VIDED TO CHINA DAILY

Vis­i­tors check out tech ad­vances at a Didi Chux­ing stand dur­ing an in­dus­try expo.

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