Daily Management Review

Didi Reports Revenue Drop As Domestic Business Hit By China's Regulatory Crackdown


Didi Reports Revenue Drop As Domestic Business Hit By China's Regulatory Crackdown
Didi Global, the Chinese ride-hailing company, announced a 1.7 per cent drop in the revenues generated by it in the third quarter on Wednesday as it pinned the blame for its lackluster performance on a crackdown by the Chinese regulators on its domestic business.
Daniel Zhang, the CEO of Chinese e-commerce behemoth Alibaba Group Holding, has resigned as a director on Didi's board of directors, the firm announced.
Yi Zhang, an Alibaba Group senior legal director, takes over as his successor.
Following its public listing on the New York Stock Exchange in June, Chinese regulators slammed Didi and ordered the company to remove its app from app stores while the Cyberspace Administration of China (CAC) examined its management of the huge cache of client data that it possesses.
Didi, the main ride-hailing startup in China, was co-founded in 2012 by former Alibaba employee Will Wei Cheng and supported by SoftBank Group.
Geely and SAIC Motor's ride-hailing services are now posing a serious threat to the company in its domestic market of China.
Didi decided in December to delist from the NYSE and pursue a Hong Kong listing in response to pressure from Chinese regulators who were concerned about the security of the data that the company possessed.
The value of the stocks of Didi has dropped by as much as 65 per cent since it launched its IPO in Hong Kong. it IPO in the United States had got its valuation of $80 billion and had made it the largest Chinese company to list in the United States since 2014.
Didi announced on Wednesday that its board of directors has given the company permission to seek a listing of its Class A ordinary shares on the Hong Kong Stock Exchange's mainboard.
"The company is executing above plans and will update investors in due course," Didi said.
Revenues of the company dropped to 42.7 billion yuan ($6.71 billion) for the third quarter, down from 43.4 billion yuan for the same period a year earlier.
Didi reported revenue from its foreign operations at nearly double of last year's revenue at 966 million yuan in the third quarter, as the company expanded its presence in Europe and South America.
Net loss attributable to ordinary shareholders was 25.91 yuan.