Didi Chuxing has been China's leading and dominating ride-hailing service throughout the country and despite plenty of competition in the market, few companies can rival Didi's efforts. Until just about a week ago when a potential new powerhouse emerged.
T3, which is short for “top 3,” officially launched after a dozen entities, including three major automakers, agreed to lay out a total of 9.76 billion yuan ($1.45 billion) for the joint venture following an initial agreement in July, according to an announcement released recently.
The big pile of cash will go toward “car-sharing services powered by renewable energy,” an offering that nicely aligns with Beijing’s push to electrify the transportation sector. T3’s investor list is also stellar, with the participation of three state-owned Chinese car makers and the country’s largest internet companies, Alibaba and Tencent.
The marriage of private and state-owned players comes as China works to attract more private money into the clunky state sector to breathe innovation and efficiency into the latter, an effort dubbed the “mixed reform.” T3 will be purely market driven, with a mission to build what it calls a “smart mobility ecosystem” by combining the data capability of its technology partners with the manufacturing know-how of its automakers, said the announcement.
China’s e-commerce giant Alibaba and social media leader Tencent lock horns on many fronts, and it’s rare to see them co-invest. They are both Didi investors, although that bond came in a more roundabout way through the merger of Tencent-backed Didi and Alibaba-backed Kuaidi in 2015.
At T3 this time, the pair’s roles remain secondary, as home appliance retailer Suning is set to be the largest shareholder by acquiring 17.42 percent equity. Suning’s leadership also explains why T3 debuted in Nanjing, the eastern Chinese city where it’s headquartered. Automakers FAW Group, Dongfeng Motor and Changan Automobile will each pick up 16.39 percent of the new entity as the second-largest holders. Tencent, Alibaba and the rest of the affiliates will divide the remaining shares between them.
Read more here