Published by Selby Webb
Co-founder, Editor and Head of Marketing of SuccessField
1 year ago
The most successful startup in the United States of America is losing $1 billion annually in China. This is not because of the way it is being executed, but because of one of their powerful competitors known as Didi Kuaidi. Both companies are forcing each other to keep dropping their prices, so that its becoming hard to say how profitable their business might stay in the Asian market.
Chief executive Travis Kalanick states that it’s not a good statistic, how ever Uber has got the upper hand because it’s able to cover its losses with the profit from other countries. According to the Canadian technology news site Betakit, Kalanick, founder of Uber, made the following statement: “We have a fierce competitor that’s unprofitable in every city they exist in, but they’re buying up market share. I wish the world wasn’t that way.”However, on the other side a spokesman of Didi Kuaidi stated that Kalanick’s statement concerning their finances were false. The rival also stated that their business had reached break-even in more than half of the Chinese cities they operate in, which are believed to be around 400. Since this is a war to conquer the market, both companies are ready to expand their services as fast as possible. Uber wants to increase its reach to nearly 100 Chinese cities by the end of this year. This would mean that they will increase their presence in China. Both companies are willing to take it to the next level as they keep trying to grow as big as possible. Not only do the business owners have an eye for the market, but also for the investors. Uber has raised more than $10 billion in fundraising last year and is backed up by investors such as Goldman Sachs, TPG, Fidelity and most recently Russian billionaire Mikhail Fridman. The Chinese competitor raised $3 billion thanks to their great influencers such as Alibaba, CIC and Tencent. Didi Kuaidi is also an active investor in Uber’s other competitors around the world. They support Lyft in the USA and Grab in Southeast Asia.