Didi is starting to engage in tourism again

Didi is exploring the tourism business and has quietly launched a beta test of Didi Travel, aiming to tap into user value and expand its business territory. This article analyzes Didi's new moves in the tourism market and explores its growth strategy in the context of a saturated online car-hailing market. It is suitable for readers who are interested in the travel market and tourism business expansion.

A shallow exploration of user value.

Before the May Day holiday, some Didi luxury car and private car users received a special text message, Didi invited them to become the first internal test users of Didi Travel. The internal test link sent with the letter will be directed to the Didi APP, and then the travel category will appear in the "All Services" menu of the relevant users. It is not difficult to see from the relevant travel service page that Didi Travel has a certain degree of richness at present, and the routes cover most of the popular tourist destinations in China, including the Tengger Desert, a popular family travel attraction, Jingmai Mountain, which has just been successfully listed as a World Heritage Site, and traditional tourist cities such as Xiamen in Fujian and Xishuangbanna in Yunnan.

It seems that in order to cater to the resurgent tour group model, the entire Didi travel itinerary planning is still a traditional tour group. A Didi travel exclusive consultant told Zui Hua that Didi travel currently mainly provides private tours, with only a few group tour products.

Judging from the service menu, the relevant Didi travel products should target the mid- to high-end tour group market. On the details page, Didi travel states that the itinerary includes accommodation in hidden luxury hotels (selected high-quality/specialty hotels), luxury cars, high-quality drivers and guides, pure play and no shopping, private groups and VIP services (exclusive Didi consultants).

However, compared with the more mature high-end tour groups in China, the related services do not have further identification, such as the specific name, grade of the hotel, car brand, etc.

In general, this was a relatively quiet internal testing activity. After the May Day travel peak season, few people discussed it even on Xiaohongshu. A person related to Didi also told "Zuihua" that the business is still in a low-key trial stage.

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This is not the first time Didi has entered the tourism market.

Didi first entered the tourism business in 2018, when it reached a strategic cooperation with Booking Holdings (NASDAQ: BKNG), an online travel and surrounding service platform, and received a strategic investment of US$500 million from the other party. Didi mentioned in an article published on its official WeChat public account that through the cooperation, the app under Booking Holdings will provide users with a Didi taxi service interface, and Didi passengers can also book hotel accommodation on Booking.com or Agoda platforms through the app.

In the following three years, Didi began to prepare to enter the tourism business.

In 2019, Didi established Beijing Jucai Power Technology Co., Ltd., which is wholly owned by Beijing Xiaoju Technology Co., Ltd., and its business scope includes domestic tourism business, train ticket sales agency, airline ticket sales agency, car rental, hotel management, etc.; in 2020, Didi established Beijing Xiaoju International Travel Agency Co., Ltd., which is wholly owned by Beijing Jucai Power Technology Co., Ltd., and its business scope includes tourism business, passenger ticketing agency, tourism development project planning and consulting, etc.

While registering the company, Didi also began recruiting talents related to the tourism business. It is reported that in 2020, Didi’s official website posted recruitment information related to the tourism business, such as senior product managers/product architects for air ticket business, senior strategic product managers for hotel business, back-end R&D engineers/platform architects, etc.

In 2021, after a series of preparations, Didi began testing the "Xiaoju Travel Agency" website. It is understood that Xiaoju Travel Agency is only an online booking platform, and the tourism products displayed are provided by partner merchants. From the information on Xiaoju Mall, it can be seen that Xiaoju Travel Agency not only provides domestic and international travel ticket booking services, but also sells travel peripheral products.

Although the cooperation with Booking Holdings to provide an entry point and the "Xiaoju Travel Agency" tested are not "tourism products" launched by Didi itself, it is not difficult to see from these actions that Didi has "ambitions" to enter the tourism market. Coincidentally, the years when Didi was developing its tourism business just happened to coincide with the epidemic, which is why it is not difficult to understand why Didi has been trying out the tourism business for such a long time.

Since last year, the tourism market has begun to recover, and Didi has started to become active again, and has established two companies related to tourism business.

In December 2023, Didi established Tianjin Changyou International Travel Agency Co., Ltd., which is wholly owned by Shangrao Juzi Technology Co., Ltd., which in turn is wholly owned by Beijing Xiaoju Technology Co., Ltd. In February 2024, Didi established Tianjin Yingkesong Technology Co., Ltd., which is wholly owned by Beijing Xiaoju Technology Co., Ltd.

Zui Hua observed that the business scope of the above two companies includes passenger ticket agency, hotel management, tourism development project planning and consulting, etc. Among them, Tianjin Changyou International Travel Agency Co., Ltd. is the main company of Didi Chuxing.

It is worth mentioning that Didi’s layout in the business travel business has begun to show results.

In 2021, Didi launched the business travel booking function on Didi Enterprise Edition, completed internal testing of the business travel booking function among employees, and opened targeted invitation testing to corporate customers. In April 2023, Didi Enterprise Edition mentioned in a tweet that using Didi Enterprise Edition can intelligently plan and book the entire "car-air/train ticket-hotel" process. If you encounter flight delays, cancellations, etc. during the trip, employees can change the ticket with one click, and will also rearrange the subsequent airport pick-up time, hotel arrival time, and other subsequent itineraries.

Why does Didi, which has already become the leader in the online car-hailing industry, insist on sharing a piece of the tourism pie?

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Since July 2021, Didi has experienced the darkest 18 months. During these 18 months, Didi's market share has been eroded by other online car-hailing platforms, falling from a high of 91% to 75.5% in 2023 (according to Cao Cao Travel's prospectus). Although it still holds the top spot in the industry, it will be very difficult for Didi to regain lost ground, and the market ceiling is beginning to emerge.

The 2023 China Mobile Travel Market Data Report shows that the online car-hailing market will be worth 358.9 billion yuan in 2023, a year-on-year increase of 14.08%, and the number of online car-hailing users will be 528 million, a year-on-year increase of 20.82%. It is worth noting that the above growth base occurred in 2022, which was affected by the epidemic.

The above report also pointed out that as the online ride-hailing market gradually matures, market saturation may limit future growth rates and user growth may gradually slow down.

On the other hand, overcapacity in online ride-hailing services has already appeared in many places.

Chongqing, Wenzhou, Dongguan and other cities have issued risk warnings for the online car-hailing market. For example, Chongqing pointed out in a related risk warning that the average monthly attendance of vehicles in Chongqing's central urban area in the third quarter of 2023 was about 59,000, accounting for only 53% of the total number of online car-hailing vehicles in the central urban area. With the current order scale, it is actually difficult to support all 111,000 online car-hailing vehicles in the central urban area to participate in the operation and service.

Some cities have also begun to control the number of online ride-hailing vehicles. For example, Sanya, Jinan, Nanjing, Wuhan and other cities have suspended the acceptance of online ride-hailing licenses and other businesses, while Yinchuan City has required that the number of local online ride-hailing vehicles be temporarily controlled within 3,000. Harbin and other cities have even begun to implement lottery license issuance. According to a relevant notice issued by the Harbin Municipal Transportation Bureau, 945 online car booking capacity indicators are planned to be released in 2023, of which 900 will be released by lottery and 45 will be released by reward.

Obviously, with the market already highly saturated, the online ride-hailing industry has entered a stage of competition for existing market share. In addition, the current market structure of online ride-hailing has become stable, and it is not easy to get a share of the pie. Therefore, Meituan Taxi resolutely gave up its own ride-hailing business, and AutoNavi also focused only on the online ride-hailing aggregation platform.

Didi's 2023 financial report shows that its total revenue in 2023 is 192.4 billion yuan, a year-on-year increase of 36.6%; net profit is 500 million yuan, achieving annual profit for the first time. These impressive data are due to the recovery of the entire travel market, and Didi has also defended its "home base" well, but at the same time, they are also due to Didi's internal cost reduction and efficiency improvement. In that year, Didi slimmed down its business by selling smart electric vehicle projects and reduced costs by reducing R&D and manpower expenses.

But for Didi at this moment, there is still a question that needs to be answered, that is, where will future growth come from.

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In fact, growth anxiety has always been a constant presence in Didi's development process.

In recent years, Didi has been expanding its business boundaries. In 2018, Didi launched "Didi Takeaway" in Wuxi, Jiangsu. Didi Takeaway said that the number of orders on the first day of launch exceeded 334,000, and the market share (Wuxi takeaway platform) jumped to the first place. At that time, Didi, Meituan, and Ele.me, the three major takeaways, started a "melee" in Wuxi, not only holding a swearing-in ceremony, but also a subsidy war. According to reports, at that time, Wuxi was full of takeaways of "fried chicken 0.01 yuan, milk tea 1 yuan". But after burning 1 billion in 10 months, Didi Takeaway finally failed to disrupt the situation and shut down its domestic business.

Didi's "car manufacturing" business actually started earlier. In 2017, Didi first found Ideal, and the two parties jointly established the "Jiedian Travel" company, but the cooperation between the two parties eventually came to nothing; in 2019, Didi found BYD to establish Beautiful Travel (Hangzhou) Automobile Technology Co., Ltd., and the two parties cooperated to launch the customized online car-hailing D1 at the end of 2020, but the sales of D1 went from bad to worse, with 10,176 units sold in 2021 and only 994 units sold in 2022; in 2021, Didi established the "Da Vinci" project internally, and the team size once reached 1,700 people, but in the end the project also "sold itself" to Xiaopeng and stepped off the stage.

In 2020, Didi began to develop community group buying and selected "Chengxin Youxuan" as an important strategic business. At the end of that year, "Chengxin Youxuan" became the first player in the community group buying track to exceed 10 million per day. However, starting in 2021, "Chengxin Youxuan" began to experience events such as relocation of headquarters, salary cuts for all employees, and closure of cities and shrinkage of districts. In 2022, some media reported that Chengxin Youxuan was removed from Didi, and companies related to Chengxin Youxuan were also in a "cancellation" state.

It is not difficult to see that in the past, Didi's diversified development basically took the approach of personally participating in the market, which should be related to the tone of the platform. Although it is the absolute leader in travel software with a user scale of more than 500 million, Didi's software has too strong tool attributes and users stay on the platform for a short time. This also makes it impossible for the platform to realize comprehensive traffic mining, sell advertisements, and make quick money like many high-traffic platforms.

But for a platform, it is extremely difficult to delve deeply into an unfamiliar track. In fact, Didi has also been looking for growth points within its own business scope, such as Didi Freight, Didi Intercity, Didi Express, Didi Car Rental, etc., but these businesses are not enough to support Didi to tell a new story.

Can the travel business become a turning point for Didi? At least from the perspective of market trends, there is a chance.

The 2023 China Mobile Travel Market Data Report shows that the online travel market size in 2023 will be 897.5 billion yuan, a year-on-year increase of 20.07%; the number of online travel users in 2023 will be 509 million, a year-on-year increase of 20.62%. The response of the capital market has also made the tourism industry a target to pursue. The report mentioned that in 2023, a total of 11 platforms in the online travel field received financing, with a total financing amount of 1.94 billion yuan.

After the epidemic, the tourism market has shown a strong momentum, which is also reflected on content platforms such as Douyin and Xiaohongshu. The "2023 Douyin Tourism Industry White Paper" mentioned that in the first quarter of 2023, the number of people who posted "travel"-related content on the Douyin platform ranked second in the industry, and the number of Douyin users interested in tourism exceeded 400 million; the "2023 Travel Trend Report" released by Xiaohongshu showed that in 2023, the number of travel notes posted on Xiaohongshu increased by 273% year-on-year, the number of "citywalk" notes posted increased by 676%, and the travel-related notes of special forces popularized by college students increased by 87,530% year-on-year.

It can be seen that the tourism market still has potential to be explored. However, it is worth noting that Didi has adopted a very lightweight approach to its trial of tourism business. The relevant product details page shows that Didi Travel is only responsible for "agent recruitment", and specific tourism services and operations are provided by different commissioned travel agencies.

Of course, this approach is no different from traditional OTAs, which reuses the user value of existing platforms. However, Didi is not an OTA after all, and it still needs to solve the problem of a tool software, that is, how to effectively realize the closed loop from seeding to pulling out the grass without content.

But in any case, compared with the previous large-scale, online and offline integrated diversified breakthroughs, the trial and error cost of this attempt is very low. In the past two years, it seems that everyone has been tired, and online platforms have also focused more on mining the value of traffic and returned offline business to offline.

Author: Wei Xia; Editor: Wang Fangjie; Source: FunTalk (ID: 1093262)