Chinese ride-sharing giant Didi picks Australia for first Western foray

Chinese ride-sharing company Didi Chuxing Technology is scheduled to launch in Melbourne on June 25, 2018.
Chinese ride-sharing company Didi Chuxing Technology is scheduled to launch in Melbourne on June 25, 2018.PHOTO: REUTERS

SYDNEY (REUTERS) - Didi Chuxing Technology, the Chinese ride-sharing company which bought the mainland operations of Uber Technologies, said it will begin offering its service this month in Australia, its first foray in a Western country.

The scheduled June 25 launch in Australia's second biggest city Melbourne sets Didi up for a showdown with the US rival it bought out in China in exchange for a stake.

Didi started expanding outside Asia in Mexico earlier this year, and has said globalisation is a core strategy.

Didi's announcement on Friday (June 15) about the launch shows that business deals between China and Australia are being struck as normal even as relations between the two governments have hit a speedbump after the Federal Government proposed anti-foreign interference laws directed at Beijing.

Australian exporters have blamed anti-Beijing rhetoric for delays clearing product through Chinese Customs.

But just a day earlier, Australia's Sirtex Medical picked a US$1.4 billion (S$1.9 billion) Chinese takeover offer that trumped US company Varian Medical Systems.

"Australia has diversified mobility needs, a business-friendly environment and an inclusive culture," Didi, which is backed by bluechip investors including SoftBank Group and Apple, said in a statement.

"Didi wishes to contribute to the growth of Australia as a long-term investor and business partner by offering affordable, reliable and convenient mobility options and income-generating opportunities," it added.

Melbourne, a city of 4.5 million people with cheaper real estate than larger Sydney, is a popular Australian entry point for companies in the so-called "sharing economy". Uber has routinely launched new offerings in the city, while several Chinese and Singapore-owned dockless bicycle rental companies have picked Melbourne to start in Australia.

"We welcome competition because it keeps us focused on delivering the very best product and customer experience for riders, driver partners and Uber Eats customers and partners,"an Uber spokesman said in an e-mail.

Didi did not give any investment details or a timeline for expanding its Australian operation outside Melbourne and was not immediately available for comment.

Its statement said it would "shape product offerings and user experience in Australia based on the feedback from drivers and passengers in Melbourne and Geelong", a satellite city 75km away.

The Chinese company started recruiting drivers in Melbourne in early June "to warm responses", it added.

Didi cemented its spot as China's biggest ride-hailing company when it bought Uber's operations in the country in 2016.