Both Didi Chuxing and Uber have investment from SoftBank Group which has previously stated they have interest in the technology industry within Latin America.
Currently Didi has around 30% market share since they launched in Mexico in 2018 and the Mexican market is Didi's biggest market for the company outside of China.
Didi has also launched within Brazil after they purchased a local ride-hailing platform 99.
Didi's investors believe its push into Mexico is a good test of the company's ability to build up their market share from scratch. Investors also wanted to see how Didi would do against more direct and intense competition according to Atlantic Equities analyst James Cordwell.
“What happens in Mexico has global significance,” Cordwell said.
Didi recently made a statement saying it believes there is a “tremendous opportunity for growth” within Latin America.
“Currently, less than three in 10 Mexicans use ride-hailing, and barely one in 10 are using food delivery,” Didi said. “We’re really excited about where we are at after just 18 months here.”
Even Uber's food delivery service, Uber Eats, is getting its own competition from the Colombian-based Rappi.
SoftBank isn't done within the market either. A few months ago SoftBank was in talks with Mexican-based online used vehicle website Kavak and fintech company Konfio.
SoftBank also recently announced a new Innovation Fund worth $5 billion that will just be for the Latin American market with a focus on Mexican startups. Mexico is currently the second biggest economy within Latin America, but its startup efforts have trailed behind other countries and SoftBank is hoping to help fix that.
Toward the beginning of the year, SoftBank invested around $20 million into Mexican startup company Clip, and these kind of investments is causing other firms to take a second look at Latin America.