Didi Says Core Business Becoming Profitable As China Recovers From Covid-19
As China recovers from Covid-19, the core business of local ride-hailing major Didi Chuxing has also been picking up.
“I can share with you that the core business is profitable or making a small profit,” Didi president Jean Liu said for the first time in an interview with CNBC. She, however, did not disclose any specific figures or the measure used for gauging profitability.
“There has been a very steep drop and a very sharp comeback in China. And now you can see our business is five times the February low. So there’s certainty here,” Liu noted, adding that the outbreak has not fundamentally affected Didi’s potential in the long term.
Liu also revealed that the Beijing-based company was “overwhelmed” when the outbreak began early this year.
Wuhan, the Hubei capital with a population of 11 million and where the virus is believed to have originated, was effectively shut off from the world on January 23. Other parts of the country followed suit, with strict travel restrictions and other measures enforced to limit the movement of people.
With travel restrictions now relaxed and Wuhan reopened, Liu said that Didi has seen ride volumes go back to about 60% to 70% of its numbers before the pandemic.
“We’re a young player, but we are going global. And from this crisis we know that we can leverage our best practice in China and share with other countries,” she said.
Other ride-hailing companies worldwide are grappling with the impact of the pandemic.
Grab’s CEO and founder Anthony Tan recently revealed that the company has seen a sharp decline in its ride-hailing segment, with volumes in some markets down by double-digit percentages. Last week, the company said it’s offering its staff no-pay leaves, reduced working hours, and sabbaticals in an effort to weather the crisis.
Uber, one of the biggest players worldwide, has also seen lower trip volumes in its ride-hailing business. The US company is set to slash about 3,700 roles from its total workforce.
Didi, meanwhile, has kept its team intact. Liu said that the company has a “strong balance sheet” and that there are no plans for job cuts for fundraising.
Reference: Tech in Asia