Didi Chuxing, the Chinese ride-hailing app, is diversifying into financial services with the launch of new products such as car insurance, personal loans and crowdfunded medical insurance.

Like a number of other apps that have moved beyond their original remit – WeChat in China and Go-Jek in Indonesia – Didi will seek to leverage users’ data for new purposes, targeting them with relevant products based on the home, office and leisure locations they travel to and from.

While there is a certain logic in the development, which brings Didi into direct competition with existing fintech players such as Ant Financial (part of Alibaba) and WeSure and WeBank (part of Tencent), some observers believe it is a response to the pressures imposed by new regulations around driver recruitment and the suspension of its carpooling service Didi Hitch, following the murder of two female passengers.

“The question on everyone’s minds is [whether this is] Didi’s attempt to carve out a new sector for itself, following its 2018 losses in ride-hailing and in its investment in ofo [the cycle app]?” said Chen Lin, assistant professor of marketing at China-Europe International Business School in Shanghai.

“Some of the products – like car insurance – are low-hanging fruit for Didi,” she told the Financial Times. “But it remains to be seen whether Didi is able to profit from insurance – for example in the maturity of its risk-management methods,” she added.

The latter is particularly relevant as Didi explained that its financial products are designed for an “era of new economy and flexible employment” and that some will “lower the entry barrier for gig economy workers and broaden the scope of protection for more families”.

Sourced from Financial Times, Telegraph; additional content by WARC staff