A year ago, Didi Chuxing, China's largest ride-sharing company, looked like a quintessential “national champion”. It had driven Uber from the local market, attracted investment from Apple and was contemplating a Hong Kong IPO worth as much as $80 billion. State media coverage was fawning, government support was all but assured and the company's near-monopoly looked unassailable.
That's no longer the case. Thanks to a series of customer-safety scandals and poor service decisions, Didi has not only lost government support, it's inspired a new set of companies to target its core business. Nor is it the only champion suddenly confronting stiffer-than-expected competition from younger, scrappier rivals; Tencent Holdings, Alibaba Group and other iconic Chinese technology companies face similar pressures. If such giants are far from being toppled, they’re hardly as invulnerable as many assumed them to be.
The concept of a "national champion" dates back to the late 1990s, when the Chinese government first promulgated policies designed to foster homegrown innovation and technology companies that could further state aims, one of which was to be able to compete globally. Whether private or state-owned, firms are expected to maintain close ties to the government in exchange for regulatory and financial support.
Telecommunications giant Huawei exemplifies the role. Though it’s now trying to reassure foreign clients of its independence, the company has close links to the government; Beijing reacted with fury to the arrest in Canada of Huawei’s chief financial officer, detaining at least two Canadian citizens in what’s widely assumed to be retaliation. Huawei has spent billions on developing advanced technology and spreading it to areas previously dominated by Western suppliers, from China’s biggest cities to untapped markets in Africa.
State help gave companies the support they needed to grow. It’s also bred complacency. Didi, for instance, quickly caught the eye of policymakers keen to boost China's role in the autonomous and electric vehicle market. Unwilling to see a foreign company dominate the ride-sharing industry, the government in 2016 issued regulations that made it harder for Uber to compete. Days later, the US company sold its China operations to Didi, which soon commanded 87 per cent of the Chinese market.
The company then began to act like a monopolist. In search of cost savings after the expensive battle with Uber, it eliminated driver and rider subsidies. The result was the perception - if not the reality - that rides were becoming more expensive and harder to obtain. Then, instead of marketing its new carpooling service “Hitch” as another mode of transportation, Didi hyped it as a great way for singles to hook up, installing social media-like features in the app such as profile photos. The cavalier attitude had tragic consequences: In 2018, two female Hitch passengers were murdered by drivers within three months of each other. Amid a public and official backlash, Hitch was suspended. A reputation for ignoring safety lingers over Didi.
Competitors have seized the opportunity. Recently, Hello Chuxing, a former bike-sharing company now backed by a $583 million investment from Alibaba, launched a Hitch-like carpooling service in 300 Chinese cities. Among other features, its app includes a one-click connection to the police and multiple background checks for drivers. The company has received friendly coverage in state media. With Didi's Hitch off the market, Hello Chuxing has a shot at grabbing a share of the carpooling and ride-sharing market.
While China’s other tech champions may not have stumbled as badly as Didi, they shouldn’t feel safe either. Competition from nimble homegrown e-commerce companies has trimmed the earnings of Alibaba, China's most famous national champion, in recent months. Meanwhile, Tencent's ubiquitous social networking and commerce app WeChat, with over 1 billion monthly users, seems ripe for disruption.
WeChat has two main problems. At home, where it dominates, the service has failed to draw younger users (especially those attracted to video) and is increasingly alienating others keen to divide their personal and professional timelines for privacy's sake. Abroad, it’s had little success localising its services and breaking into markets dominated by Facebook and its WhatsApp and Instagram services.
Upstart unicorn Beijing ByteDance, by contrast, has developed the short-video sharing platform TikTok, which has become wildly popular elsewhere in Asia and even North America; it just passed a billion downloads globally. TikTok's Chinese counterpart, Douyin, has been equally successful at home, giving the company the international networking hit that continues to elude WeChat. Unsurprisingly, WeChat blocks the sharing of Douyin videos on its platform.
And the challenge from ByteDance is growing. In January the company launched a Snapchat-like service called Duoshan, which has been downloaded 5 million times on China's App Store in the last month. While that’s nothing compared to WeChat's 1 billion users, it’s double the downloads of the older app. Indeed, WeChat has become so alarmed by increasing local competition that it blocked Duoshan and two other new social-networking apps from its platform in January.
Such defensive tactics might work, especially if the government decides to protect established champions in the interests of stability. But, relying on state help probably isn’t the smartest strategy in a fast-moving digital marketplace such as China's. National champions would be wiser to rediscover the hunger and innovative energies that helped them succeed in the first place.
Bloomberg
Abu Dhabi Sustainability Week
Sonchiriya
Director: Abhishek Chaubey
Producer: RSVP Movies, Azure Entertainment
Cast: Sushant Singh Rajput, Manoj Bajpayee, Ashutosh Rana, Bhumi Pednekar, Ranvir Shorey
Rating: 3/5
Killing of Qassem Suleimani
What can victims do?
Always use only regulated platforms
Stop all transactions and communication on suspicion
Save all evidence (screenshots, chat logs, transaction IDs)
Report to local authorities
Warn others to prevent further harm
Courtesy: Crystal Intelligence
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Jetour T1 specs
Engine: 2-litre turbocharged
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Results
Light Flyweight (49kg): Mirzakhmedov Nodirjon (UZB) beat Daniyal Sabit (KAZ) by points 5-0.
Flyweight (52kg): Zoirov Shakhobidin (UZB) beat Amit Panghol (IND) 3-2.
Bantamweight (56kg): Kharkhuu Enkh-Amar (MGL) beat Mirazizbek Mirzahalilov (UZB) 3-2.
Lightweight (60kg): Erdenebat Tsendbaatar (MGL) beat Daniyal Shahbakhsh (IRI) 5-0.
Light Welterweight (64kg): Baatarsukh Chinzorig (MGL) beat Shiva Thapa (IND) 3-2.
Welterweight (69kg): Bobo-Usmon Baturov (UZB) beat Ablaikhan Zhussupov (KAZ) RSC round-1.
Middleweight (75kg): Jafarov Saidjamshid (UZB) beat Abilkhan Amankul (KAZ) 4-1.
Light Heavyweight (81kg): Ruzmetov Dilshodbek (UZB) beat Meysam Gheshlaghi (IRI) 3-2.
Heavyweight (91kg): Sanjeet (IND) beat Vassiliy Levit (KAZ) 4-1.
Super Heavyweight ( 91kg): Jalolov Bakhodir (UZB) beat Kamshibek Kunkabayev (KAZ) 5-0.
MATCH INFO
World Cup qualifier
Thailand 2 (Dangda 26', Panya 51')
UAE 1 (Mabkhout 45 2')
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MATCH INFO
Fixture: Thailand v UAE, Tuesday, 4pm (UAE)
TV: Abu Dhabi Sports
Landfill in numbers
• Landfill gas is composed of 50 per cent methane
• Methane is 28 times more harmful than Co2 in terms of global warming
• 11 million total tonnes of waste are being generated annually in Abu Dhabi
• 18,000 tonnes per year of hazardous and medical waste is produced in Abu Dhabi emirate per year
• 20,000 litres of cooking oil produced in Abu Dhabi’s cafeterias and restaurants every day is thrown away
• 50 per cent of Abu Dhabi’s waste is from construction and demolition
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
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The Bio
Favourite holiday destination: Either Kazakhstan or Montenegro. I’ve been involved in events in both countries and they are just stunning.
Favourite book: I am a huge of Robin Cook’s medical thrillers, which I suppose is quite apt right now. My mother introduced me to them back home in New Zealand.
Favourite film or television programme: Forrest Gump is my favourite film, that’s never been up for debate. I love watching repeats of Mash as well.
Inspiration: My late father moulded me into the man I am today. I would also say disappointment and sadness are great motivators. There are times when events have brought me to my knees but it has also made me determined not to let them get the better of me.
Our family matters legal consultant
Name: Hassan Mohsen Elhais
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UAE currency: the story behind the money in your pockets
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Day 3, Abu Dhabi Test: At a glance
Moment of the day Just three balls remained in an exhausting day for Sri Lanka’s bowlers when they were afforded some belated cheer. Nuwan Pradeep, unrewarded in 15 overs to that point, let slip a seemingly innocuous delivery down the legside. Babar Azam feathered it behind, and Niroshan Dickwella dived to make a fine catch.
Stat of the day - 2.56 Shan Masood and Sami Aslam are the 16th opening partnership Pakistan have had in Tests in the past five years. That turnover at the top of the order – a new pair every 2.56 Test matches on average – is by far the fastest rate among the leading Test sides. Masood and Aslam put on 114 in their first alliance in Abu Dhabi.
The verdict Even by the normal standards of Test cricket in the UAE, this has been slow going. Pakistan’s run-rate of 2.38 per over is the lowest they have managed in a Test match in this country. With just 14 wickets having fallen in three days so far, it is difficult to see 26 dropping to bring about a result over the next two.
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