Didi starts car-hailing services in Russia

Didi Chuxing, China's largest ride-hailing platform, is stepping up efforts to expand its global footprint and diversify its businesses, despite the negative impact of the COVID-19 pandemic.

The company said it has launched a car-hailing service in Russia earlier this week, marking the first European market in its global road map as it looks to outpace rivals such as Uber Technologies Co. The services will initially be available in southwestern Kazan, the capital and largest city of the Russian Republic of Tatarstan, home to the country's largest IT park.

The move came as the peak global daily orders on Didi's platform surpassed 50 million for the first time on Tuesday, reflecting reviving consumption and economic recovery.

Gu Dasong, executive director of transportation and the development research center at Southeast University, said the Russian market could offer a rich source of customers for Didi.

According to a 2019 study by HSBC Bank, 45 percent of Russians have at least one ride-hailing app on their phones.

Didi, however, could face competition from Yandex Taxi, which holds about 27 percent of the local ridehailing market.

Yandex Taxi was founded by Russian internet conglomerate Yandex NV. In February 2018, it has merged with Uber in Russia, Armenia, Azerbaijan, Belarus, Georgia and Kazakhstan to create a new private company called MLU BV, incorporated in the Netherlands, according to the company's official website.

The expansion into Russia is part of Didi's broader efforts to expand its overseas presence. Its services are already available in a string of countries and regions including Australia, Japan, Brazil, Mexico, Costa Rica, Chile, Colombia and Panama.

Cheng Wei, CEO of Didi, said at the start of this year that the company aims to achieve 100 million global orders per day and accumulated 800 million monthly active users globally in three years.

At the same time, Didi is also diversifying into more areas, including on-demand freight services, car rental, financing, food ordering and delivery services in its home turf, as the company looks for more opportunities to boost investor confidence.

Didi officially unveiled the Uber freight-like service on its app in June, with the service initially available in 10 cities including Beijing, Shanghai, Shenzhen and Hangzhou, the capital of Zhejiang province.

Sun Naiyue, an analyst at Beijing-based market research consultancy Analysys, said that Didi's edge lies in the 550 million-odd users on its platform. Also, Didi has many offline companies as partners, which can attract more people to shift from driving cars to driving trucks and vans.

Liu Qing, president of Didi, said in an interview with CNBC in May that the company's core ride-hailing business has become profitable, but she did not offer specific data.

Analysts said Didi's active performance in recent months also indicated that it may be preparing to go public in the near future, though the company said it did not have any such plans yet.