DiDi Global Inc. appears to be executing a classic "cash cow nurturing star businesses" strategy—leveraging its strong domestic profitability to fund high-growth potential overseas ventures (Brazil food delivery) and future technological barriers (Robotaxi).
**Domestic Business: Steady Growth, Driven by Efficiency** Market concerns about DiDi's domestic operations often revolve around two key issues: whether industry competition will resurge and whether margin improvements come at the expense of drivers.
During a non-deal roadshow (NDR) with Goldman Sachs analysts on November 28, DiDi's management addressed these concerns: 1. **Stable Competitive Landscape**: Despite temporary subsidy increases by competitors like Gaode during the National Day holiday, DiDi emphasized this was a short-term tactic tied to local promotions. Post-holiday data showed subsidies quickly tapered off, with no resurgence in price wars. 2. **Sustainable Margin Expansion**: DiDi reaffirmed its 2025 target of a 3.7% gross transaction value (GTV) margin for domestic operations, projecting a further 50-basis-point (bps) increase by 2026. This growth stems from structural cost reductions (e.g., higher EV adoption) and refined consumer incentives, not driver exploitation.
**International Expansion: Brazil Food Delivery as a Battleground** While domestic operations focus on stability, Latin America represents aggressive growth. DiDi is making a calculated bet on Brazil’s food delivery market, leveraging unique advantages rather than reckless spending. - **Market Potential**: Brazil’s food delivery total addressable market (TAM) is estimated at $20 billion in 2024. - **Competitive Edge**: Compared to local giant iFood, DiDi boasts a larger two-wheeler (motorcycle) fleet and a proven track record in high-ROI investments (e.g., ride-hailing over 5 years, fintech over 2 years). - **Expansion Plans**: Despite potential three-way competition, DiDi’s progress has exceeded expectations, with plans to penetrate more lower-tier cities next year.
**Robotaxi: Commercialization Accelerates** DiDi is transitioning its autonomous driving technology from R&D to commercialization. - **Current Operations**: Fully driverless Robotaxis are operational in Guangzhou’s Huangpu district and Beijing’s Yizhuang. - **Scaling Up**: The fleet will expand to over 1,000 units in 2025, supported by a new model co-developed with GAC Aion, set for launch next month. - **Long-Term Vision**: DiDi aims to lead the Robotaxi sector by capitalizing on its vast transportation data and network density.
**Shareholder Returns** DiDi reiterated its commitment to shareholder value, executing a $2 billion share repurchase program (valid through March 2027). From August 25 to November 21, the company repurchased $23.2 million worth of shares.
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