If Didi wants to go global, it’s going to have to piss off a few friends

Photoshop by TiA. Original image from Wikimedia

At WSJD Live on Wednesday, Didi Chuxing president Jean Liu dropped a bit of a bombshell: Didi plans to expand beyond China. “We intend to be global,” Jean revealed. “We aspire to be a global company.”

Liu didn’t provide specifics, but said that Didi is currently evaluating, and may partner with or compete against established players in local markets all over the globe. It may also look for untapped markets with no strong local competitors.

Conflicts, conflicts everywhere

Global expansion for Didi could be fairly effortless or exceedingly awkward, depending on how the company decides to play its cards. During its growth phase in China, Didi spun a web of partnerships with global ride-hailing companies that would likely make it easy for Didi to expand into other local markets if it was willing to partner with local players. But if it wasn’t it might well find itself in the awkward position of competing against its own interests.

In many markets. Didi would have to choose between its investor or its investments

In North America, for example, Uber and Lyft are the established powers. Following Didi’s Uber China acquisition, Uber is Didi’s single largest shareholder, so any attempt at competition with Uber would be tough. Smart companies like Didi typically don’t try to destroy their own investors. But partnering up with Uber would be awkward too, because Didi is a shareholder in Uber competitor Lyft. So if it wants to access the US market, Uber would need to either go against its own shareholder or against one of its own partners and investments.

Possible? Yes. Awkward? Definitely.

The situation is more or less the same in Asia. In Southeast Asia, Didi would be forced to choose between its own investor (Uber) or its own investment (Grab). Ditto in India, where Didi has invested in local Uber competitor Ola.

In most parts of Europe, Didi really would only have Uber to worry about, so a partnership there looks quite plausible, although it’s hard to know what Didi could bring to the table that Uber needs, considering it’s already a dominant force there. The same is true in many South American and African markets, where Uber is already well-established and may not feel any need to bring a partner, especially a “frenemy” like Didi, onboard.

Doable but difficult

This is not to say that Didi can’t expand globally, of course. And although it might make inter-company relations awkward, the decision of who to side with in many of these markets will likely to be easy to make when boiled down to dollars and cents. For example: If Didi can make more money by partnering with Uber in the US than through its Lyft investment, siding with Uber in that market would be a no-brainer.

Still, Didi’s already got an iron in the fire of many of the world’s biggest ride-hailing markets, and at best that likely means expansion will be diplomatically difficult. It’s also probably not something Didi can dodge; the company did say it could target markets without strong competitors, but those are few and far between. More than likely, if Didi wants to go global, it’s going to have to piss off at least a few of its friends.

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