China’s two biggest internet companies have called a truce after spending billions of renminbi in the past six months to grab market share in the nascent taxi-hailing app market.
Alibaba and Tencent have treated savvy, smartphone-wielding Chinese to taxi rides, and lavished tips on taxi drivers, to drum up support for their respective taxi apps – Kuadi Dache (Alibaba’s “Swift taxi”) and Didi Dache (Tencent’s “honk honk taxi”).
Wang Jian, an expert on ecommerce from Analysys International, a Beijing consultancy, estimates that about Rmb2bn ($325m) was spent between January and June, but says that since then, both taxi apps have scaled back the massive subsidies they are paying. “The two sides have ceased fire,” she said, after battling to a stalemate with each claiming about half of the Chinese market.