The online travel and mobility sectors are closely watching a significant strategic move. On June 29, TONGCHENGTRAVEL (ASX: 00780) and DIDA INC (ASX: 02559) jointly announced that TONGCHENGTRAVEL, through its wholly-owned subsidiary eLong, Inc., intends to launch a voluntary conditional comprehensive cash offer for DIDA INC.
Five major shareholders of DIDA INC have signed irrevocable undertakings to accept the offer, representing approximately 53.70% of the company's issued share capital. If successful, DIDA INC would become an indirect subsidiary of TONGCHENGTRAVEL. The announcement clarified that the offeror's intention is not to privatize DIDA INC and that it plans to maintain DIDA INC's listing status on the Hong Kong Stock Exchange post-acquisition.
From an industrial logic perspective, this transaction represents far more than a simple market bargain for TONGCHENGTRAVEL. It is a strategic expansion centered on traffic, usage scenarios, and a broader shift from travel to everyday mobility.
An Entry Ticket at a Low Point
Since its high-profile listing as the "first shared mobility stock" in June 2024, DIDA INC's share price performance has been lackluster. Financial data shows its 2025 revenue declined 36.18% year-over-year to RMB 502 million. The stock has continued to fall this year, with its market capitalization significantly shrinking.
As of the last trading day before the announcement, DIDA INC's stock closed at HK$1.27. Its total market cap had hovered around HK$1.3 billion, less than one-third of its IPO valuation, with a price-to-earnings ratio around 9x. The company described 2025 as a year of "considerable challenges," with industry observers calling it its toughest period since listing.
For a strategic partner like TONGCHENGTRAVEL, this may represent an opportune entry window. DIDA INC's current low valuation appears mismatched with its substantial existing user base and service capacity. This gap stems not from a failure of its core business model but from limitations in independent user acquisition and a historically narrow business focus.
Within TONGCHENGTRAVEL's ecosystem, DIDA INC's driver network and user assets could be revitalized and their value reassessed. China's ride-sharing market has matured into a phase of competition for existing users. Industry reports indicate a stable triopoly has formed since 2019, with DIDA INC consistently holding the second position with a 31% market share.
Despite a decline in overall orders and transaction value in 2025, DIDA INC's platform saw growth in both its registered user base and supply-side resources. Its app now boasts over 415 million registered users and 21 million certified private car owners. For TONGCHENGTRAVEL, this represents a nationwide network of real mobility demand and a vast, convertible user pool.
Financially, DIDA INC reported 2025 revenue of approximately RMB 502 million, with ride-sharing services contributing about RMB 455 million. Its ride-sharing gross margin stands at 67.2% and the company has been profitable for seven consecutive years. What DIDA INC may need is a new catalyst for scale growth.
Travel inherently begins with transportation. A user base of hundreds of millions with a "mobility-first" mindset, when seamlessly integrated with an online travel platform's flights, hotels, tickets, and vacation products, opens significant cross-selling opportunities. While DIDA INC faces a growth ceiling with its single business line, TONGCHENGTRAVEL, with its large traffic pool and diversified structure, could turn every car trip by these over 400 million users into a new growth channel.
The over 20 million certified drivers represent a core supply asset built over a decade through rigorous verification. The inherent nature of ride-sharing, driven by genuine travel needs, creates a self-sustaining supply model—a wide moat for DIDA INC that could become a valuable supply chain supplement for TONGCHENGTRAVEL. In the eyes of the capital market, TONGCHENGTRAVEL is acquiring a light-asset, high-barrier, and market-validated business at a minimal premium.
Adding a High-Frequency Component to the Ecosystem
A fundamental challenge for online travel agencies is low user engagement frequency. Even frequent travelers have limited annual trips, leading to long user dormancy periods. TONGCHENGTRAVEL's core business has traditionally focused on hotel bookings and transportation ticketing, which contribute nearly 70% of its revenue. Despite growth in other areas like asset-light hotel management, it remains in the "low-frequency, high-average-order-value" travel business.
Meanwhile, growth in China's pure tourism market is slowing. Data shows the online travel user base declined 6.03% year-over-year to 515 million in 2025, the first drop since 2021. In contrast, ride-hailing is a high-frequency consumption scene, second only to food delivery and instant retail in many markets.
Industry data suggests that commute-related ride-sharing demand accounts for as much as 35% of the market. According to Frost & Sullivan, ride-sharing is the fastest-growing segment in the mobility sector, with a projected CAGR of 29.4% from 2024 to 2028.
The classic internet logic is using high-frequency services to drive low-frequency ones. The key difference here is that TONGCHENGTRAVEL wouldn't need to "burn money" to build traffic from scratch. It would be layering synergistic value onto DIDA INC's existing foundation.
Integrating DIDA INC's high-frequency mobility scenarios into TONGCHENGTRAVEL's tourism product conversion pathways could significantly boost user activity and consumption frequency for TONGCHENGTRAVEN's existing 250 million annual paying users. Imagine promotional offers for nearby hot springs during peak ride times, hotel upgrades redeemable with commute mileage, or weekend getaway ideas suggested after a rainy-day trip.
Such scenario integration could transform TONGCHENGTRAVEL from a simple one-stop travel service platform into a composite gateway blending daily mobility with leisure consumption. As a listed company, TONGCHENGTRAVEL's valuation is currently anchored to traditional OTA metrics. Incorporating another listed entity, DIDA INC, could redefine it as an integrated "transportation + tourism" ecosystem platform, expanding its narrative from serving billions of annual travel trips to addressing hundreds of millions of daily local transport needs.
This acquisition signifies TONGCHENGTRAVEL's entry into the massive ride-sharing arena, opening up space to potentially "recreate a core business."
Extending Reach into Lower-Tier Markets
As one of the most determined and successful players in penetrating China's lower-tier markets, TONGCHENGTRAVEL may be using DIDA INC to complete a missing piece of its下沉 market strategy. Its past approach has involved a three-pronged strategy: low-cost customer acquisition via WeChat's ecosystem, penetration from train/bus tickets into hotel and destination消费, and supply chain management for hotels and attractions in lower-tier cities.
This strategy has been successful. TONGCHENGTRAVEL's 2025 revenue grew 11.9% to approximately RMB 19.4 billion, with adjusted net profit up 22.2% to about RMB 3.4 billion. Notably, over 87% of its registered users are from non-first-tier cities.
This success has provided deep insights into the needs of lower-tier market users, focusing on solving the "last mile" of travel consumption and even daily life services. TONGCHENGTRAVEL has been strengthening its intercity bus ticketing business and deploying smart payment terminals at bus stations in partnership with Alipay.
The ride-sharing industry has also accumulated a substantial user base in下沉 markets. DIDA INC operates in over 300 cities across China, many being tier 2, 3, and 4 cities where public transport is limited. Ride-sharing is naturally suited for these areas and scenic spots.
Once integrated, a user booking a county hotel on TONGCHENGTRAVEL's platform could seamlessly use DIDA INC's service for transportation from the high-speed rail station to the hotel and then to nearby attractions. Solving this "last mile" pain point in下沉 market travel could upgrade TONGCHENGTRAVEL's role from a pre-trip booking platform to an on-the-ground mobility service operator.
More importantly, it signifies TONGCHENGTRAVEL's gradual expansion from travel mobility into everyday life mobility. By completing its portfolio during an industry valuation trough and embedding the potential of低频 travel into the daily commutes of hundreds of millions, TONGCHENGTRAVEL's move to acquire DIDA INC is more than a horizontal integration; it is a strategically significant dimensional shift.
Of course, integration challenges remain, including aligning ride-sharing supply with旅游 rhythms and managing compliance risks in下沉 markets—issues not automatically resolved by an acquisition offer. However, from a broader industry cycle perspective, as the boundaries between mobility and travel blur, the player holding the high-frequency entry ticket is better positioned to define the rules of the next phase.
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