Meituan Halts Car-Sharing Service 'Dache' After 2019 Losses
Didi Chuxing Restarts Service Suspended Due to Chinese Regulatory Crackdown
[Asia Economy Beijing=Special Correspondent Jo Young-shin] Meituan, China's largest delivery and lifestyle services application (app) company, is restarting its car-sharing service business called 'Dache.' Meituan Dache had removed its app from app stores in 2019 and announced it would no longer expand the business after being overshadowed by Didi Chuxing, China's largest car-sharing company. However, as Didi Chuxing faced regulatory backlash from Chinese authorities, Meituan appears to be seeking new members again.
According to Chinese media including the state-run Global Times on the 12th, Meituan has re-registered its car-sharing app Dache on app stores and started recruiting new members. The Global Times explained that Meituan provided detailed information about its privacy policy when re-registering the Dache app. Meituan emphasized that it does not share personal information with third parties and never uses personal information for purposes other than the original intent to protect privacy.
Meituan launched its car-sharing service in Nanjing, Jiangsu Province, and Shanghai in 2018, quickly capturing a 30% market share and expanding its presence, but it could not overcome the dominance of Didi Chuxing. As losses accumulated, Meituan removed the Dache app from app stores in June 2019 and has since only acted as an intermediary connecting users of other car-sharing companies and the Meituan app.
With Didi Chuxing, which holds over 90% market share, being suspended from recruiting new members due to data security and national security concerns, Meituan seems to be re-entering the car-sharing service market. Other Chinese car-sharing companies besides Meituan are also expected to launch aggressive marketing campaigns, including price discounts, to fill the void left by Didi Chuxing. Some analysts suggest that the Chinese car-sharing service market has entered a new era of intense competition, likened to the Warring States period.
Previously, China's cyber regulatory agency, the Cyberspace Administration of China (CAC), pointed out that Didi Chuxing might have violated national security during its initial public offering (IPO) on the New York Stock Exchange and ordered a halt to Didi Chuxing's recruitment of new members.
Meanwhile, the Global Times reported that as of the end of last year, the size of China's shared car service market reached 5.7 trillion yuan, accounting for 13.1% of global car-sharing service consumption. It also forecasted that the market size would grow to 10.6 trillion yuan by 2025.
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