FOLLOWING today’s shock news that China’s homegrown ride-hailing app Didi Chuxing has “won” the market by acquiring Uber’s China operation in a US$35 billion deal, Grab CEO Anthony Tan said they too can win the Southeast Asia market from Uber.
In what many are calling Didi’s victory over Uber, which dominates most of the ride-hailing market share in other countries, the Beijing-based transport app said in a statement it will buy Uber’s brand, business and data in China.
According to Bloomberg, Didi founder and CEO Cheng Wei and Uber CEO Travis Kalanick will join one another’s boards, and the deal will see Uber receiving 5.89 percent of the combined company with 17.7 percent of the economic benefits.
Cheng said in a statement: “Didi Chuxing and Uber have learned a great deal from each other over the past two years. This agreement with Uber will set the mobile transportation industry on a healthier, more sustainable path of growth at a higher level.”
Just before the merger was confirmed, Tan sent an email, obtained by TechCrunch, to Grab staffers, praising Didi, who has invested in Grab, as a local hero for beating Uber at their own game.
— Yoolim Lee (@yoolimleenews) August 1, 2016
Tan wrote: “After more than a year of intense competition, our investor and global partner Didi has effectively won the battle for market share dominance in China.”
“Didi’s success reinforces what we have believed all along. That we live in a very diverse world and there is no one-size-fits-all answer,” he said. “Localized solutions best solve local problems. Like Didi did in China, we make sure that the unique pain points of users in Singapore or Jakarta or Manila will get addressed because they are prioritized over the competing needs of users in New York or London or Istanbul.”
Tan predicts that the acquisition will see Uber attempting to step up efforts to win over the market share in Southeast Asia, but believes that Grab will prevail.
“We have seen that when the local champion stays true to their beliefs and strengths, they can prevail. We see this happening in China, and it will be the same here,” he said.
“They’ve lost once, and we will make them lose again.”
Didi and Uber’s deal comes after Uber investors pushed for a truce between the two rivalling companies last week, as the battle for dominance in China was costing the San Francisco-based company at least US$1 billion a year.
Kalanick wrote in a blog post seen by both Bloomberg and the New York Times: “As an entrepreneur, I’ve learned that being successful is about listening to your head as well as following your heart. I have no doubt that Uber China and Didi Chuxing will be stronger together.”