China’s Didi Chuxing has rolled out a suite of financial products, including auto insurance, personal loans and crowdfunding services, on its mobile-based platform, diversifying its business as the core ride-hailing operation faces a potential slowdown.
The move could make Didi a direct competitor in the financial services arena with Tencent’s WeSure and WeBank platforms, as well as Alibaba Group, which owns the financial and payments giant Ant Financial.
The new financial products were tested in 10 cities and have now been introduced nationwide, according to Didi.
The business diversification came after a company-wide reorganization that followed multiple passenger safety scandals in the main ride-hailing business.
Under the “financial services” section inside Didi’s mobile application, one can now find offerings such as credit, healthcare insurance, vehicle insurance, crowdfunding for critical illnesses, and wealth management products.
Didi also launched a “mutual-help” crowdfunded healthcare insurance product, which aims to provide an entry-level healthcare insurance plan to qualified Didi app users, particularly short-term, temporary workers.
By pooling the capital raised and breaking down the cost, participants with illness can share the fund, while all participants can enjoy healthcare insurance coverage with a lower fee, the company claims.
TechNode reports that Didi now offers medical insurance, provided by Hong Kong-listed online insurer Zhong An (06060.HK), for its app users with a monthly fee of around 20 yuan (US$2.9).
With the new service offerings, Didi said it aims to “provide innovative and reliable personal financial products in an era of new economy and flexible employment.”
“Financial services are expected to help Didi build a stronger network of collaboration and shared interests and in turn, a more efficient transportation ecosystem,” it said in a statement.
It marks the first time that Didi has showcased financial services to retail customers across the country since the firm established a financial division last year.
According to Chinese media, Didi financial division is dedicated to building a financial technology (fintech) platform to offer services like financing, insurance and payments, targeting drivers and passengers as well as mobility service partners in the Didi service ecosystem.
In 2015, Didi introduced Chinese insurance and fintech giant Ping An as an investor. The two companies have since been working together, launching accidental insurance products for both Didi drivers and passengers in October that year.
In 2016, another mainland financial biggie — China Life Insurance — injected US$600 million capital into Didi.
The ride-hailing giant counts US peer Uber Technologies, iPhone maker Apple and Japanese conglomerate SoftBank Group, as well as the Chinese internet behemoth Tencent Holdings (00700.HK), among its other backers.
According to figures provided by Didi, it currently has 550 million users across mainland China, with 31 million registered drivers on the platform.
Despite controlling close to 90 percent of the country’s ride-hailing market, Didi’s main business has been facing public and government pressure following the deaths of two woman passengers in separate incidents in 2018.
The company suspended its carpooling service, Hitch, after the crime incidents sparked public outrage, and introduced new measures on driver qualifications and background checks to improve passenger safety, as the company faced increased scrutiny from authorities.
In November, China’s Ministry of Transport slammed Didi in a public notice, citing violation of multiple safety rules and also vowing steps to reduce anti-competitive behavior in the ride-hailing industry.
Didi is already contending with a shortage of drivers in major cities, as toughened regulations led to reduced numbers of eligible applicants.
With an aim to diversify and explore new revenue streams, Didi was reportedly poised to expand into the hotel-booking business, as well as entering the food delivery market in foreign countries.
But now the efforts seem more focused on branching out into financial services and emerging as a fintech giant.
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