Chinese ride-hailing service giant, DiDi Chuxing, started the service in Japan in September 2018. Seeing Japan as a big opportunity to expand the market. However, after 2 years of localization, the company halts its service in 11 prefectures including Aomori, Akita, and Niigata from July 1. 

Chinese DiDi cooperated with Japanese Softbank to establish DiDi Mobility. Unfortunately, the expansion strategy was influenced by COVID19 and some other reason that the service was halted at this time. The reason can be broken down into 2 dimensions. 

Inbound use is only 20%

DiDi applied the successful model from China to Japan. However, inbound usage is only 20% in reality. The result was also triggered by coupon promotion. In this stage, the profit can’t cover the expanse that the company should focus on increasing the usage rate. Seriously, the Coronavirus problem restricted people to stay at home, and the usage was significantly decreasing.     

The mature taxi service in Japan

In Japan, the taxi service is quite mature. People usually use a phone call to appoint a taxi service which is quite different from the DiDi application appointment service. People also may think that professional taxis should have a green license plate, not a white plate. The white plate is for private vehicle registration and the green one is for commercial purposes. 

As a foreign company, localization is always not easy to get into the new environment that culture differences and people’s behavior may cause a gap between expectation and reality. In order to succeed in Japan, understanding the target people and mix into the local culture is key to attract users.

Source: 中国発シェアサービス、日本で直面した2つの壁