Rebirth 2010: I taught Mr. Lei how to make a mobile phone

Chapter 752 Qin lost its deer, but silently gained it.
When capital accumulation reaches a critical point, a company expands in size but lacks profitability, the competitive environment continues to deteriorate, and the capital market suddenly cools down, when these factors erupt simultaneously in a short period of time, there is often only one outcome: large-scale mergers and acquisitions.

The dramatic fluctuations in the capital market over the past few years have led these companies through two distinctly different stages of development:
First, there is a period of fierce competition, during which companies use price wars and other means to continuously acquire smaller competitors and gradually form a market monopoly.

Then came the merger and acquisition period. When only a few giants remained in the market, excessive market competition became a shackle that restricted profit growth.

More importantly, these companies are backed by strong strategic capital, making it impossible for either side to completely defeat the other.

In this situation, merger becomes the only viable solution.

This process often accelerates, especially when they face a stronger competitor together.

In early 2015, an unprecedented wave of mergers and acquisitions swept through China's internet industry, with several major mergers and acquisitions occurring, including Didi and Kuaidi, 58.com and Ganji.com, Meituan and Dianping.com, and Ctrip and Qunar.com.

On August 1, 2016, a merger and acquisition announcement broke all previous records.

Didi Chuxing officially announced a strategic agreement with Uber Global to acquire all of Uber China's assets, including its brand, business, and data.

After the merger, Didi Chuxing was officially renamed Didi Dache, and the company's valuation soared to $350 billion.

This merger made Didi Chuxing the second largest ride-hailing giant in China, second only to Dache Chuxing. The combined market share jumped to 42%, second only to Dache Chuxing's 54%.

Although the merger initially shocked the media, after in-depth analysis, industry insiders generally believe that while it was unexpected, it was also reasonable.

Last year's ride-hailing war saw Didi spend nearly $20 billion, while Uber China spent over $15 billion.

In June of this year, Uber raised $6 billion and Didi raised another $45 billion, but they still lack sufficient confidence in the face of their common enemy, the ride-hailing industry.

From a capital perspective, both parties share four major investors: BlackRock, Hillhouse Capital, Tiger Global Management, and China Life Insurance.
At the business level, facing strong competition from ride-hailing services, both companies have long relied on low-price subsidies to attract users, and neither has been able to achieve profitability in the Chinese market to date.

At the company level, in order to cope with the market expansion of ride-hailing services, the two parties had previously held multiple cooperation negotiations and even repeatedly discussed the merger.

Some media analysts pointed out that this merger is likely a response to the new regulations for ride-hailing services issued on July 28.

This new regulation marks the first time that China's domestic online ride-hailing services have been brought under legal control. It specifically stipulates that ride-hailing platforms must not operate at prices below cost and must not disrupt normal market order in order to exclude competitors or monopolize the market.

After the new regulations are implemented, the low-price strategy that Didi and Uber China have long relied on will face significant challenges. Once they lose their price advantage, both companies will still lag significantly behind the already well-established ride-hailing industry in terms of service quality and other aspects.

In this situation, merging to achieve complementary advantages becomes the only viable way out for both parties.
In the more than 20 years of development in the internet industry, Cheng Wei's Didi Chuxing set a precedent by establishing its industry position through continuous market competition and large-scale mergers and acquisitions.

Looking at the history of ride-hailing development in China, it is almost a history of Didi's mergers and acquisitions and expansion.

The initial market landscape was characterized by a multitude of competing players.

Didi suffered a setback in Beijing during its early entrepreneurial days, and then moved to Shanghai, where it defeated competitors such as Dahuangfeng Taxi.

At that time, a situation emerged in which Beijing's taxi service, Shanghai's Didi Chuxing, Hangzhou's Kuaidi Dache, and Guangzhou's Yidao Zhuanche were divided into four major players.

As competition intensified, Yidao was the first to be eliminated and was acquired by Didi.

The market landscape evolved into a three-way battle between Didi, Didi, and Kuaidi, which was jokingly referred to by the media as the "first ride-hailing war".

After Didi and Kuaidi merged last year with the help of capital, Didi once surpassed Kuaidi in the ride-hailing market thanks to its carpooling service.

However, due to the mistakes of its T0 strategy, it backfired, and the previously attacked ride-hailing services regained the advantage by offering better service and price.

This, in turn, gave Uber China an opportunity to rise, and Cheng Wei of Didi regained the initiative, making Didi Chuxing the leader and forming a new "three-way standoff," thus bringing the second ride-hailing war to an end.

Didi has now made another move, acquiring Uber China, which has foreign investment backing, prompting in-depth media investigations.

Subsequently, media reports revealed that the merger was initiated by Uber Global, with the management teams of both companies being the main driving forces.

In fact, Uber had hoped to merge with Didi since March 2015, but the merger fell through because the two sides had too large a gap in their expectations regarding the shareholding ratio.

Now, with its market share gradually shrinking, Uber is once again seeking a merger with Didi, lowering its initial demand for a 40% stake in Didi to 30%, and finally settling on a 20% deal.

It is worth noting that the presence of two members of the Liu family—Liu Qing, president of Didi, and Liu Zhen, head of strategy for Uber China—may be the biggest driving force behind this acquisition.
Even news that Uber investor Bill Gurley had a secret meeting with Liu Qing at an overseas ranch last month has been unearthed.

The current ride-hailing market in China has formed a new "two-horse race" pattern.

But unlike the usual script of "the top two competing, the third disappearing," this time it's a business competition between the top two. The second-in-command, unwilling to fall behind, stages a "big fish eats small fish" scenario, constantly devouring the third-in-command, only to find out in the end that it's still the top two.
So all those years of eating were for nothing?

Media outlets widely predict that the "third ride-hailing war" is about to begin.

Chen Mo looked at the online media reports about the merger of Didi and Uber, wondering if the third ride-hailing war would even break out.

However, the first major bike-sharing war is about to begin, and Tiantian Bike, a subsidiary of Didi Chuxing, will launch next month, which will allow it to compete with Mobike. As for Dai Xiao of ofo, he is currently extremely anxious, calling Bi'an Venture Capital every few days. Wu Dan, unable to bear the harassment, blocked him. Now, due to financial pressure, ofo is stuck on campus and has missed a golden opportunity.

Although the ride-hailing industry has already built a strong competitive advantage, even if Didi emerges in a new form and is larger than before, the presence of the Liu sisters inside is enough to give Cheng Wei a hard time.

Chen Mo's only worry right now is one thing
"Didi, which acquired Uber China, is currently valued at approximately $350 billion and is actively seeking investors with the aim of achieving a valuation of $600 billion at the time of its IPO. Its next goal is to list in the US."

Looking at the report, Chen Mo narrowed his eyes and immediately gave Wu Dan an important but not urgent task: to allocate resources to closely monitor Didi's IPO progress.

After all, this company has a history of "going public without permission".

Although the other party was punished after going public, it was too late. Compared to fines and product removal, these were minor issues. A large amount of sensitive data, user privacy information, and map data had already flowed overseas.

Considering the many bizarre fates of top domestic talents over the years, it's hard to say there might be a connection.

Therefore, with him here this time, he will absolutely not allow such a lousy company to survive.

The most effective way to prevent companies from listing in the US is to completely destroy them.

Although it is difficult to operate a taxi service independently, it is not difficult with the strong financial support from the other side.

But this would be considered a monopoly, and then the authorities would crack down on it, which is not what Chen Mo wants to see.

Chen Mo hopes to build a healthy competitive market ecosystem.

Therefore, in China's ride-hailing market, it doesn't matter who your future competitors are.

This is not Didi, it's very important!!!

Thinking about how well-behaved Pony Ma has been these past two years, and how he's managed the company's benefits quite well, unlike some company executives who have such a strong odor that it's almost overflowing, and even perfume can't cover it up.

In addition, both sides have recently been keeping to themselves and avoiding interference in the market competition in the same sector, which is quite prudent.

Players will spend money on games from companies that have high-quality and fun games. It's all about earning a living based on merit, which is perfectly fine.

In addition, with the development of the other side in recent years, he has indeed taken a lot of luck from Little Ma. Chen Mo's remaining conscience still makes him feel a little indebted to Little Ma. After all, in the first few years of the other side's development, it was basically taking advantage of Tencent.

Furthermore, Pony Ma is a relatively low-key and pragmatic person, unlike Jack Ma who has too many ulterior motives.

However, to avoid being wishful thinking, Chen Mo felt it would be better to exchange opinions with Brother Ma.

There's no time like the present, so Chen Mo picked up the phone, found Little Ma's private number in his contacts, and dialed it.
"The number you dialed is busy, please try again later."

Chen Mo frowned. It's been hundreds of years since he last called, and now the call is already busy. Is it really that coincidental?

He then set the matter aside.

Since Didi is enjoying such great success, he decided to send them a "congratulatory gift".

He instructed Chen Tong: "Spread the word about Lu Qi."

That evening, Chen Mo stared at his phone, which was still connected to another call. "Damn it, did that bastard block me?!"

Why are you being so stingy? You're such a petty person.
Lu Qi officially joins Beyond Group as Senior Vice President and Senior Strategic Advisor.

The official announcement released on the website of the other side caused an earthquake in the entire technology industry.

As the epicenter began to spread, domestic media were the first to be stunned.

Their first reaction was that the other side was lying!

It's worth noting that Lu Qi had been rumored to be returning to the Amazon, and there were even reports that he was recuperating in Taiwan. Who would have thought he would suddenly appear on the other side of the strait?

What expansion is this?

My second thought was, how could the other side possibly lie?

Such a major personnel appointment couldn't possibly be treated so lightly by the other side, so the truth must be what's in the announcement.

What's even more shocking is the timing: less than 24 hours after Didi announced its acquisition of Uber China.

The personnel changes at the Beyond Group have dominated all media headlines.

This move by the other side has even been interpreted by the media as the beginning of the 'third ride-hailing war'.
(End of this chapter)