Alibaba Invests 40 Million Yuan in Dazhong Chuxing
Shanghai Dazhong Public Utilities (Group) Co., Ltd. announced on Wednesday that Dazhong Chuxing plans to increase capital, enlarge shares and attract a new investor – Alibaba. The Chinese tech giant is said to invest 40 million yuan ($6.27 million) in Dazhong Chuxing in two phases. After the capital increase, Alibaba will hold 10% equity of the company.
Established on January 5, 2016, Dazhong Chuxing mainly provides travel services such as online booking of passenger transport. It was jointly funded and set up by Dazhong Transportation (Group) Co., Ltd., Shanghai Dazhong Public Utilities (Group) Co., Ltd., and Shanghai Dazhong Enterprise Management Co., Ltd.
Dazhong Chuxing is the first mobile internet car-hailing platform established by taxi companies in China, and it is also the first of its kind to obtain online car license in Shanghai.
It now has four kinds of car-hailing services, namely, taxis, special cars, government and enterprise cars and site cars. By 2020, its business scope had extended to 18 cities including Shanghai, Shaoxing, Tianjin, Hangzhou and Suzhou. In the first three quarters of this year, its operating income reached 12.51 million yuan and net losses were 12.5 million yuan.
Alibaba has been deepening its business layout in online car-hailing, and invested $280 million in Hello Inc., which just this year completed new rounds of financing worth over $500 million.
According to incomplete statistics, Alibaba and its subsidaries such as Ant Financial have invested in or acquired more than 30 enterprises in the travel sector, including Hello Inc., Didi Chuxing, AutoNavi Software, Xpeng Motors and others. Its investment covers the whole upstream and downstream industrial chain, from travel platforms, infrastructure to tool services.
SEE ALSO: Hello Inc. Secures $289 Million of Financing, Alibaba Becomes Its Shareholder
The insiders believe in the huge potential and promising prospects of the online car-hailing industry, and predicts a diversified travel market. Especially as the Didi app was removed from app stores this year, the second echelon of Chinese online car-hailing platforms all exert their strength and compete for the market.
The country’s Ministry of Transport recently released a set of data suggesting that in June 2021, 13 online car-hailing platforms in China had monthly orders exceeding 300,000, while in October, 18 platforms reached this number. This indicates that many platforms had over 300,000 monthly orders for the first time after this July.
