Apple has announced an investment of $1 billion (about RM4 billion) into Didi Chuxing, the largest ride-sharing service in China. Apple CEO Tim Cook says that this to help it understand the Chinese market.
Didi Chuxing – formerly known as Didi Kuaidi – currently controls more than 87-percent of the ride-sharing market in China; which translates into some 11 million rides a day. Didi itself is not exactly hurting for cash. The company had previously raised several billion dollars of funding on its own; which makes this investment from Apple all the more unusual.
Experts speculate that Apple is looking to understand the automotive industry. This is due to rumours that the company is looking into making its own autonomous vehicle; and since it has already recruited several dozen automotive engineers.
On the other hand, Apple has been facing plateauing sales in China; a worrying instance for its second largest market. The company has also recently seen its online book and movie service blocked by the Chinese government; which may have prompted this move to better understand how to deal with the crucial Chinese market.
Didi, on the other hand, is part of a global alliance to halt the rapid expansion of Uber. While it is the dominant force in its native China, the company has a substantially smaller reach everywhere else. It had recently introduced crossplatform ride hailing with its other partners in the allies – namely Lyft and Grab.
It will be interesting to see what Apple gets out of this investment; but the additional funds will almost certainly go towards Didi’s efforts to outcompete Uber on a larger scale.