What’s Wrong With China’s Champions
Even as a few favored giants dominate the market, scrappy young rivals pose a threat in everything from ride-sharing to social media.
Didi may have gotten too complacent.
Photographer: Qilai Shen/BloombergA year ago, Didi Chuxing Inc., China's largest ride-sharing company, looked like a quintessential “national champion.” It had driven Uber Technologies Inc. from the local market, attracted investment from Apple Inc. and was contemplating a Hong Kong IPO worth as much as $80 billion. State media coverage was fawning, government support was all but assured and the company's near-monopoly looked unassailable.
That's no longer the case. Thanks to a series of customer-safety scandals and poor service decisions, Didi has not only lost government support, it's inspired a new set of companies to target its core business. Nor is it the only champion suddenly confronting stiffer-than-expected competition from younger, scrappier rivals; Tencent Holdings Ltd., Alibaba Group Holding Ltd. and other iconic Chinese technology companies face similar pressures. If such giants are far from being toppled, they’re hardly as invulnerable as many assumed them to be.