Why Apple Invested in Chinese Taxi Company
Industry News

Why Apple Invested in Chinese Taxi Company

By Mainak Biswas September 14, 2016 - 775 views

Back in May, when Apple invested $1 billion in Didi Chuxing, a Chinese ride-hailing service, people were left wondering what that was all about. Was Apple trying to enter the Chinese market? Was it trying to launch a new app that helps people hail taxis? Was it about the media tool which helps people access entertainment in their cars? Or was it just that Apple was super intuitive? Looks like, Apple knew what was to come much earlier than most speculated.

Didi, which is one of the prominent taxi hailing services in China, just purchased Uber’s Chinese business for $35 billion. While Uber retains 20% of the stake, it quickly becomes clear that Apple gained access to not only Didi Chuxing’s customer list, but also Uber’s Chinese consumers list. Effectively, this will help Apple to track consumer behavior in China and also enhance its products for the Asian giant. It is a different story though, that certain Apple services are not available in China yet.

However, this move indicates that larger technology companies often gain access to markets and consumes by purchasing companies or investing in them. Apple did just that.

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How might this help Apple?

Consumer lists help companies to brand themselves, design marketing campaigns and also choose different branding strategies. While China remains one of the largest markets for Apple products in the world, it is also the largest overall market in the world, by its sheer size. It is extremely important to have access to such a mammoth market, if one were to gain access t its creamy layer. This is just what Apple did and it was one of the wisest decisions made by this company. There are rumors about Apple launching self-driven cars, similar to Google but those may not be valid.

What could be valid is that Apple is looking at the $1 billion investment as an investment for its digital marketing campaigns, which will come every time there is a new product launch. We only have to wait and watch to see how Apple will use its new found access to customer information in China. The possibilities are endless but to begin with, Apple will certainly benefit from the various market segments that these ride hailing companies cater to.

Looking forward

Like any good financial move, it was not clear why Apple invested $1 billion in Didi Chuxing. However, after a couple of months and a few more financial contracts signed, it is clear what Apple was aiming at: access to Chinese consumers’ information and data. Whether $1 was the right price to pay for this information is something that time will tell, but most likely, it was a wise move. In other words, it also helps us to know how much information is valued today. Consumer information is not only a hotly debated topic, but also something that is sold or bartered. When the time comes, one may need to keep certain things confidential. All the more reason to keep it safe and secure.

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