Top car-hailing app Didi Kuaidi and recently merged discount sites Meituan Dianping are valued at more than $15 billion each. This promise has sparked a venture capital onslaught. Search engine operator Baidu reckons the market will be more than four times as big. Analysts at CLSA forecast transactions will grow by 46 percent a year to hit 2.3 trillion yuan ($362 billion) by 2019.
Though the industry represents a small slice of the services economy in the People’s Republic, opportunities are huge. As costs mount amid uncertain returns, investors seem happier with less risk.Īs China’s 649 million web users turn to their smartphones to order food, buy movie tickets or book manicures, so-called “online-to-offline” services have become the web’s fiercest battleground. However, the three are deploying very different strategies. Tencent, Baidu and Alibaba are spending billions of yuan to connect the country’s web users to real-world goods and services, like taxis and takeaway food. China’s internet giants are battling to dominate the local services sector.
