Exactly one year after setting up in South Africa, DiDi, a Chinese multinational ride-hailing company, has announced its departure.
The company launched in Gqeberha in March 2021, with further launches in Cape Town, in May, and in Gauteng in August of the same year. Its launch in South Africa was forecast to bring more variety while heightening competition within the ride-hailing market in the southern Africa region and across Africa, but this was not the case.
What led to the shut down?
Though South Africa marked DiDi’s 17th country of operations, the entry into the country was poorly timed. Just months after the launch, South Africa was hit by its third COVID – 19 wave, prompting stricter COVID regulations from the government due to the rapid rise in infection rates – regulations that greatly hindered DiDi’s growth efforts.
While the regulations took place, DiDi’s competitors Uber and Bolt put up a fierce competition to outrank the newcomer and remain relevant in the market. Uber, which locally launched in 2013, doubled its presence to over 40 cities in 2021, while Bolt, which entered the South African market in 2015, introduced green riding options shortly after launching food delivery service in 2021.
DiDi has had a multitude of successful ventures globally, dominating 50% of the South American ride-hailing market after expanding to Brazil in 2018 and acquiring Brazilian ride-hailing company 99, dominating 80% of the Chinese market to date, and globally serving over 500 million customers. These were great markers that indicated success should the company have come into South Africa with similar strategies.
During DiDi’s launch, Uber controlled 78% of the South African ride-hailing market, while Bolt controlled 28%, and though DiDi initially launched with premiums such as lower commission fees for the drivers, and better ride-sharing options for riders, the platform didn’t see a significant shift in the market share.
DiDi pulling the plug on South Africa is hot on the heels of numerous concerns and recent protests from local stakeholders citing low wages and high commissions from the existing platforms. The protests are an ask for the government to intervene and regulate the industry.