©️True Detective AlphaSeeker Original
Author | Xiao Zhuo
A piece of news that “online car-hailing on Douyin may become a reality” has made waves in the already restless online car-hailing industry.
On December 26, Tech Planet reported that Douyin has opened the qualifications for platform service providers of transportation and travel services, and T3 Travel has launched a small program on the Douyin APP. Yife Shunfengche, a number of local travel service platforms, etc. have also settled in Douyin in the form of small programs.
The news quickly sparked speculation. In this regard, people familiar with the matter responded that the Douyin open platform only provides relevant tools, and “Douyin has no plans to be a taxi-hailing platform.”
At the “Douyin Open Platform Developers Conference” in September this year, Douyin officially explained the idea of ”orderly opening up”, and improved the opening mechanism according to the characteristics of various industries. For an APP with more than 600 million daily active users, the conversion method of enriching traffic is inevitable for the development of the platform.
Therefore, regarding the matter of “hailing a taxi on Douyin”, what is more interesting is the attitude of online car-hailing companies.
Difficult to have both traffic and capacity
In addition to launching small programs, the actions of online car-hailing companies on Douyin also include selling taxi coupons and launching advertisements for new apps. Car companies need Douyin even more.
Traffic is the attraction of online car-hailing companies to settle in Douyin, and it is also a key word to understand many industry trends in recent years.
As a highly integrated online and offline business, the core capabilities of online car-hailing companies include two categories: capacity and traffic. The former is related to the service supply capability of the enterprise, and the latter determines how many consumers the enterprise can reach. According to these two types of capabilities, online car-hailing companies can be divided into three categories: comprehensive platforms, traffic-based platforms, and capacity-based platforms.
Didi is a comprehensive online car-hailing platform. Although Caocao Chuxing and T3 Chuxing also have their own transportation capacity and traffic, they are obviously inferior to Didi in terms of scale. AutoNavi is currently the most typical traffic-based platform. It provides online car-hailing services through the aggregation model. Tencent, Huawei, and Meituan, which has both self-operated and aggregation models, also fall into this category. Small and medium-sized online car-hailing companies that rely on aggregation platforms to obtain orders belong to the third category.
In July last year, Didi’s APP was removed from the shelves, and a rare window period appeared in the industry. Platforms such as Meituan, AutoNavi, Caocao Chuxing, Shouyue Automobile, and T3 Chuxing quickly launched subsidy programs, trying to swallow the vacancy left by the overlord Didi. In a widely circulated screenshot, T3 travel urgently adjusted the Kaesong plan, requiring all staff to turn on the combat mode, and actively implement 007 (round the clock).
After more than a year, the desire of the chasers to carve up the Didi market has not been realized. Before the window period appeared, Didi occupied 90% of the market share. Under the encroachment of challengers, Analysys and other data show that Didi’s market share has dropped from the highest 90% to 70%. How strong” situation.
One of the reasons for this situation is the high cost of attracting newcomers. According to Caixin’s report, the minimum discount for a new user of T3 and Caocao Travel is 88 yuan, and most users will not become loyal users until they have taken a taxi ten times. If the initial advertising and local promotion costs are added, the cost of acquiring a loyal customer can be as high as hundreds of dollars.
Expansion costs are high and retention is difficult. In addition, today’s online car-hailing is no longer an industry where capital is willing to invest huge sums of money. The ambition of the enterprise can only give way to reality. According to the “LatePost” report, investors’ attitude towards online car-hailing has changed to resource coordination, and priority is given to recovering investment costs. The current focus of T3 and Caocao Travel has shifted to increasing income and reducing expenditure. Caocao Travel has given up its previous goal of 20% of the national market share in March this year.
In addition to the difficulty of expansion, the high cost of new acquisitions has also brought about another result: the prevalence of aggregation models.
Backed by the AutoNavi map app with over 600 million monthly active users, AutoNavi taxi-hailing has grown rapidly during the industry window; although Meituan taxi-hailing has its own business, in most cities it is mainly based on access to three-party aggregation services. In July this year, Huawei released the third-generation Hongmeng operating system. The system has a built-in aggregated taxi service Petal travel. In the same month, Tencent launched an aggregated taxi function in the “travel service” of WeChat Jiugongge, which is connected to Caocao Travel, T3 Travel, Sunshine Travel, Shouqi car-hailing and other taxi-hailing platforms.
Compared with the self-operated model, the advantage of the aggregation model lies in the fast development speed and low operating costs. In a market environment with scarce traffic, small and medium-sized online car-hailing companies can only rely on the aggregation platform, even if it will become the latter’s capacity provider. Facing the pressure of reality, even companies with independent visions like Cao Cao and T3 can only gradually approach “flow”.
The performance of getting closer to “traffic” is that enterprises have gradually strengthened cooperation with external platforms, and at the same time actively expanded traffic sources. According to the “LatePost” report, in July this year, Cao Cao Chuxing chose to access Didi Special Offer and Huaxiaozhu for the first time, and the proportion of external orders increased to 2/3. In September of this year, WeChat Jiugongge added a first-level taxi-hailing entrance, which was connected to T3 travel alone.
But aggregation is not a perfect pattern. This model is facing the risk of stricter supervision. In August this year, the regulatory authorities interviewed a number of online car-hailing platform companies, and first mentioned the responsibility of “paying in advance” for the car-hailing aggregation platform. This was interpreted as a qualitative assessment of the aggregation platform. will be closer to the common carrier. At the same time, due to the lack of control over service supply, aggregation platforms are also prone to fall into homogeneous competition.
AutoNavi’s solution to this is to increase its influence on local capacity platforms and launch self-operated businesses at the same time. In October this year, AutoNavi launched its self-operated online car-hailing platform “Rocket Travel” in Beijing. This is a long-prepared plan. The “aggregation + self-operated” structure will enable Gaode to have a more stable transportation capacity, but the company also needs to make progress in the direction of Kaicheng, expansion of transportation capacity, and management and maintenance of drivers and vehicles. New exploration, currently “Rocket Travel” has only obtained an operating license in Beijing, and it is only available in Beijing for the time being.
The new connotation of online car-hailing
No matter what kind of online car-hailing company it is, in the post-Didi industry environment, no platform can replicate Didi’s development curve or replace Didi’s position. Under the circumstances that it is difficult to have both capacity and traffic, the coexistence of multiple modes of platforms will still dominate the development of the industry for a period of time.
Too many things have changed in the online car-hailing industry. As a part of “basic clothing, food, housing and transportation”, it is still important. Every company must occupy a place, but the lessons learned from “domination but still difficult to make profits” also make all parties in the market remain cautious. At the same time, the market environment that has entered the stock market era is also requiring all parties to put forward new thinking on the online car-hailing business.
Since 2018, the daily order volume of the national online car-hailing market has been maintained at between 20 million and 30 million orders. The order growth of each participant is essentially cannibalized from competitors. It’s not an appealing competing narrative. Compared with the business itself, the added value of “online car-hailing” is the key to attracting bets from all parties.
In Caixin’s report, the person in charge of Tencent’s travel once said that the purpose of Tencent’s aggregation platform is not to realize traffic, but to improve the travel experience in the WeChat ecosystem, and at the same time obtain opportunities to cooperate with online car-hailing and car manufacturers. For the medium and long term, there will be more opportunities for car owner services, smart cockpits and cloud computing.
The logic of Huawei’s entry into online car-hailing also has something in common with this. The industry believes that Huawei launched Petal travel. On the one hand, it hopes to obtain a certain share of income from this business. The market occupies a position, which is conducive to subsequent vehicle sales cooperation.
Cao Cao travel also wants to find a breakthrough from the trend of electrification and intelligence of cars. In September 2022, Pony.ai announced a strategic cooperation with Caocao Travel and the Intelligent Driving Center of Geely Automobile Innovation Research Institute. The three parties will jointly build an open commercial operation platform for intelligent driving. Caocao Mobility will provide Pony.ai with vehicles that can be used for fully unmanned driving and form a Robotaxi fleet. The online car-hailing platform has become an important bargaining chip for Geely to lay out the Robotaxi track.
Occupying the market, collecting commissions, and realizing profits, this set of logic is no longer the entirety of the online car-hailing industry. In the wave of vehicle electrification and intelligence, online car-hailing should also be reconsidered in the multiple framework of “car company + platform + industry chain”. However, until all parties have explored a new solution to the new framework, it is still difficult to reduce the cost, the reality of stock competition and the long-standing pressure of compliance, which are still the reasons that restrict the industry from making greater breakthroughs. The cooperation between enterprises and Douyin is an inevitable product of the industry environment, but it is difficult to influence the general logic of the industry.
(Disclaimer: This article only represents the author’s point of view, not the position of Sina.com.)
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