Who will be the final winner? —— A SWOT analysis of Didi Taxi and Uber

Posted on by New Media Obeservation

Living in a big city in China means you have to deal with the increasingly crowed traffic. To grab a taxi on demand is a difficult thing until the appearance of Taxi Apps like Uber and Didi Taxi. In recent months, the competition between the two has been increasingly fierce. For both experts in the industry and ordinary users, there are consistent debates on which one is better. In this article, a SWOT analysis will be conducted to compare the situations of the two apps and predict which one would have a better development in the future.

  1. Strengths.

For both of the two apps, they have good usability and fair price. But for uber, it primarily provides special car service with different vehicle types for users to choose from, while Didi Taxi provides diffenret kinds of services including not only special cars but taxi, car-sharing and “free ride” as well. Moreover, Didi Taxi may provide designated driver services in the near future. The two apps both have their own advantages. However, it is remarkable that Uber has two unique strengths, namely dynamic pricing model and compulsory order dispatch. Firstly, as well known by many people, the pricing model of Uber is an excellent adoption of the economic principle “supply and demand curves”, which flexibly adjust its prices to ensure the supply of cars meets the changing demand. This can bring better usability for users and fair interest for both drivers and customers. Secondly, compulsory order dispatch deals with the pain point of customers which guarantees the success rate of ordering a car.

  1. Weakness.

As aforementioned, to solve the problem of 100% successfully ordering a car is a unique strength for Uber, however this has been a huge weakness for Didi Taxi. There are many reports on that drivers from Didi Taxi platform refuse to take order for various reasons (including undesired destination) which results in a bad user experience. As for Uber, the obvious weakness may lie in some of its function design. For example, the discount is represented as code in Uber rather than coupon (adopted by Didi Taxi). Discount code is a widely adopted method in western countries, but it is not in line with the use habit of Chinese customers.

  1. Opportunities.

For Uber, it has gained a rich experience from its oversea operation. Its expansion to the Chinese market is seen as an inevitable trend. Also, it is almost the first player in this market. It has acquired a large number of users now. Interestingly enough, it is also mentionable that the brand reputation of Uber among the Chinese users is quite good. For Didi Taxi, the opportunity is actually mainly from the industry environment. On one hand, Uber is facing restrict regulation by relevant governmental department. On the other hand, more powerful local companies like Wechat are imposing pressure and restriction on Uber. Taking this chance, Didi Taxi increases its promotion scale and publicity scale. Besides, for Didi Taxi, the Chinese market has its full attention while, for Uber, it will not put its full energy into the Chinese market which is only a part of its globalized business. Thus, Didi Taxi may have a big opportunity to capture the market share even though it came later into the industry.

  1. Threats.

Unlike other countries, the governmental regulation in China has been a vitally important factor which will influence the whole industry. For both of the two apps, the regulation has some negative impacts given that the Chinese government views such apps would hugely impact the traditional taxi industry. However, this threat has more impact on the foreign app Uber than the local app Didi Taxi. To negotiate with the local government may be the most important thing to do for the further development of Uber. Further more, it is sad for Uber that its model can be easily copied. While it’s making efforts to adjust itself to the Chinese market, there may be a lot of similar apps appearing. In reality, it is the idea of Uber model rather than the Uber app itself that is valued.

 

To conclude, in terms of the app itself, Uber has more advantages than Didi Taxi, even though some adjustments need to be made for Uber to better fit the Chinese users. However, the Chinese market is a very unique one. The ecosystem in China is very much different from that overseas. Hence, Uber may have many barriers for further development. In the long term, the capability of Uber to compete with increasingly improved local apps would be in doubt.

Is Mango TV going to beat Youku.com?

Posted on by New Media Obeservation

For the online video industry in fierce competition, Mango TV, originated from the traditional TV industry, is believed to be an intruder. Now, Mango TV has competed its first round financing with estimated value of 7 billion Chinese Yuan. There have been a lot of discussion about it and many people wonder if Mango TV would put a great threat to the current structure of the online video industry, or even beat the current market leader Youku.com (优酷).

According to the data released by Science and Technology of Tencent, the Internet platform of Mango TV has covered Over-the-top content (OTT), internet video, IPTV and Mobile TV. It had a peak rate of 60 million viewers online, the video view (VV) of 80 million per day and active OTT users of 7 million. As for its advertising revenue, it is estimated to reach 0.7 billion Chinese Yuan by the end of 2015. As for Youku.com, its official report states that the unique users per month is 140 million, VV is 750 million and revenue in 2014 was 4 billion. By the comparison of their market values, the scales of business revenue and the volumes of video view (VV), we can find that the figure of Youku.com is around 9 times that of Mango TV. However, Mango TV is believed to have a more space to rise after it goes public.

It is important to realize two unique reasons for the great development of Mango TV in only one year. Firstly, Mango TV hugely relies on Hunan TV which is the market leader in the traditional TV industry in China. Thus, it has access to plenty of high-quality content including variety shows, TV series and other programmes. Most importantly, due to the “exclusive broadcast” strategy released in 2014, Mango TV is the only platform providing these high quality programmes. Secondly, Mango TV owns an internet TV license, which allows it to easily integrate its content resources on various platforms including TV, mobile, PC etc.

At the first glance, Mango TV is an Internet product and a distributional channel for videos, just like its counterpart Youku.com. However, in essence, it is currently only a platform serving for a traditional TV station. Its key feature is still the content. By contrast, video websites like Youku.com features in distribution channels. The business of Youku.com counts on the large amount of users, while the business of Mango TV bases on its high quality contents. To look further, we find that they have different developmental directions as well. For Mango TV, it already has good content, so it needs to increase user volume. For Youku.com, it needs to integrate content production in its value chain. In other words, Mango TV is more like a content provider seeking for consumers while Youku.com is more like a distributer seeking for good content.

Thus, it is impossible to completely equal the two and judge which one would beat the other. However, in the short term, it must be admitted that Mango TV has a great potential for consistent development. But in the long term, its impact to the video industry is actually in doubt.