DiDi Entry Mode Choice into the Australian Market
DiDi has entered Australian markets through a joint venture mode (Arabian Business, 2019). However, service quality and pricing competition are internal matters of the individual ride-sharing company. DiDi has just established a good relationship with local operators and tech firms. They have acquired local ride-sharing services and have managed to convince taxi operators to join them. DiDi has also established a good rapport with the local regulators and tech firms. DiDi has advanced technology; they rely on AI capabilities to address mobility problems. Due to their improved service delivery, DiDi has become a significant Uber competitor in Australia (Vij, 2020). The price is lower compared to uber hence many people prefer it. This method has helped DiDi gain a market despite its late entry.
Selection Criteria of the Joint Venture Entry Mode
DiDi’s selection of the joint venture entry mode was a matter of combining external and internal factors (Watson IV et al., 2018). The Australian market size was a critical factor in consideration of the appropriate entry mode. High demand for the ride-sharing services in Australia, informed by enlarging market size, gave DiDi an opportunity. I think the company could only cooperate with the local operators and tech firms in Australia to get introduced into the market dynamics. DiDi decided to venture into ride-sharing due to the increased demand for the service among the people.
Besides, government regulations in Australia, making it mandatory to have a local partner as you enter the Australian markets, could have informed the joint venture model. DiDi ensured a good relationship with the local ride-sharing operators with many industry partners and tech firms.
The internal factors which could have played a significant role in deciding the entry approach include international experience and flexibility. DiDi is a giant ride-sharing company with very many operations in different countries. Therefore, it was well aware of the benefit of a joint venture technique. The company’s experience in entering foreign markets was critical in venturing into the Australian market. The power of the joint venture in market exploration and learning the market dynamics is significant. Besides, DiDi’s flexibility in adopting new technology and meeting the customers’ demands led to successful entry into the Australian market.
Distribution System Decisions
Arguably, technology has been a critical contributing factor to the growth of the ride-sharing industry. Efforts are made to meet the consumer demands through a combination of factors which guarantee effective logistics and distribution. The partnership is also a strategy used to build the reputation of individual companies. The method of requesting a taxi online is an excellent service decision and is expected to witness rapid growth. DiDi provides discount coupons and red packets to specific customers (Vii et al., 2020). DiDi created a brand platform, “Do More Pay Less” the brand is an excellent benefit to both drivers and passengers. This has attracted more customers as the standard pricing provides an alternative to people that enables them to travel and enjoy what life offers and spend less.
Besides, DiDi has entered foreign markets such as in Taiwan, Brazil, Japan, and Mexico, and they are growing at a high rate, mainly because of their service delivery. DiDi has a low pricing decision and an increased subsidy than its competitors (Jacquet, 2018). This is a good move because it has attracted many customers. DiDi also has devoted to satisfying the demands of the various groups of people by use of the market segment and, on the other hand, satisfies travel demands for various kinds of groups, i.e., use of Kuciche for the general public and tailored cars for high-end business people who either are after business or luxury. Low pricing is a wise pricing decision made by DiDi to improve their marketing strategy.
Possible Partners
Arguably, pride is all that DiDi advocated for in every market it enters. The company is a significant partner of PrideFEST. Through this partnership, DiDi supports Western Australia’s mission of freedom of sexual and gender diversity. Besides, DiDi is an official rideshare partner of Movember. The goal of Movember is to support men’s health. To reach the maximum donation goal of $70,000, DiDi will donate 10 cents per ride throughout November. This partnership has strengthened the reputation of the company building customer trust.
References
Arabian Business. (, 2019). China’s Didi to set up a joint venture in Abu Dhabi – Wamda. Retrieved 17 October 2020, from https://www.wamda.com/2019/07/chinese-ride-hailing-app-didi-set-jv-venture-abu-dhabi
Jacquet, A. (2018). A power struggle in the taxi industry: a challenge for Uber and Lyft regarding their Service clauses. PM World Journal, 7(2), 1-16.
Vij, A. (2020). Understanding consumer demand for new transport technologies and services and implications for the future of mobility. In Data-driven Multivalence in the Built Environment (pp. 91-107). Springer, Cham.
Vij, A., Ryan, S., Sampson, S., & Harris, S. (2020). Consumer preferences for on-demand transport in Australia. Transportation Research Part A: Policy and Practice, 132, 823-839.
Watson IV, G. F., Weaven, S., Perkins, H., Sardana, D., & Palmatier, R. W. (2018). International
market entry strategies: Relational, digital, and hybrid approaches. Journal of International Marketing, 26(1), 30-60.