Didi Chuxing's huge success underlines how mobile internet technology is spawning a tide of innovation in China

China's internet landscape is never short of stories about overnight success. But when it comes to Didi Chuxing, the country's largest ride-hailing platform, its rapid ascent has still amazed many people. Within just five years, the startup, founded with 800,000 yuan ($121,000; 102,000 euros; ￡90,000), has grown into a heavyweight with a valuation of $50 billion.

Its success underlines how mobile internet technology is spawning a tide of innovation in China and how thousands of startups are scrambling to jump onto the digital bandwagon.

According to global consulting company CB Insights, China is now home to more than 50 startups valued at more than $1 billion, among 214 so-called unicorns worldwide. The country has the largest number of unicorns outside the United States, and Didi is ranked the second most valuable startup, after rival Uber Technologies Inc.

Jonathan Woetzel, a director of the McKinsey Global Institute and lead author of the report "China's digital economy: a leading global force", says China has one of the most active digital-investment and startup ecosystems in the world.

"Beyond scale, it is the enthusiasm for digital tools among China's consumers that will support growth, facilitate rapid adoption of innovation, and make Chinese digital players and their business models competitive," Woetzel says.

According to Woetzel, China's digital globalization is only just getting started but is gathering momentum, with local companies scrambling to venture out beyond their home turf to search for opportunities.

One such player is Didi. Sitting on an abundant cash reserve and powered by over 7,000 employees, the Beijing-based company is making stronger and faster moves on overseas expansion, as well as business extension into next-generation technologies, including new energy vehicles and driverless cars.

When Didi acquired global ride-sharing giant Uber's China services a year ago, it secured absolute dominance in the Chinese market. As of now, more than 450 million users and 21 million drivers are using its services.

And the fight is coming to overseas markets, where the company says it is confident of competing with Uber. It is stepping on the accelerator of global expansion, chiefly by partnering with a number of ride-hailing companies in foreign countries.

The company set up an international business department in February. "We are seeking to be the biggest operator of automobiles in the world," says Cheng Wei, founder and CEO of Didi.

In August, Didi announced it would invest in Dubai-based ride-hailing platform Careem, a week after it announced cooperation with Estonia-based Taxify, as the company steps up its push into markets such as the Middle East, Africa and Europe.

It also allied with Japan's SoftBank to inject around $2 billion into its existing partner Grab, and cooperated with Brazil-based taxi-on-demand service 99; Uber's major US competitor, Lyft; global car-rental company Avis Budget Group; and India's ride-hailing company Ola.

Most of these platforms are fierce competitors of Uber in their respective regions. Building local partnerships with these influential local partners, which is a faster way than starting from scratch, has given strong impetus to Didi's global presence.

Zhang Xu, an independent smart-transportation analyst, says that whether Didi can take on Uber in overseas markets will depend on how quickly it can integrate its resources with its foreign partners. "So far, Didi's ties with them have been capital-oriented, but deeper collaboration can be expected on technologies, products and services," he adds.

On top of tapping into international markets, Didi is also actively promoting the application of new energy vehicles. It formed a joint venture with the Global Energy Interconnection Development and Cooperation Organization earlier this year to roll out charging networks for electric vehicles. The move came after the Beijing-based startup signed up with National Electric Vehicle Sweden AB, which bought the assets of bankrupt Saab Automobile AB in 2012, to jointly develop electric vehicles.

According to the International Energy Agency, more than 750,000 electric vehicles were sold worldwide last year, compared with 547,220 in 2015. China has surpassed the US to be the largest user of electric vehicles, accounting for 40 percent of the electric vehicles sold worldwide��twice as much as the US.

"The future of transportation is new energy vehicles, and ride-sharing will be a key link in promoting new energy on the road," says Cheng.

Contact the writer at masi@chinadaily.com.cn

(China Daily Africa Weekly 12/08/2017 page8)