China’s Uber has bet against its rival in Brazil.
One of the largest tech firms in China is injecting large sums of money into salesman of used cars.
China’s homegrown Uber, Didi Chuxing, invested over $200 million in a platform online for trading used vehicles, which is an industry that has shifted into high gear across China.
RenRenChe is the platform that connects individual used car buyers with sellers and its literal translation is People People Cars.
The used car market in China is readying for an explosion in growth. The country’s China Automobile Dealers Association is expecting sales of used cars to reach over 12 million units annually, which would be an increase of close to 20% compared to last year.
The easing of restrictions by the government related to used cars will help to fuel the industry’s growth as well, said analysts.
Didi defeated rival Uber’s attempt to make a successful business venture in China, and said that used cars will offer a possibly lucrative addition to the growing empire it is enjoying.
An analyst in Beijing, say Didi Chuxing wants to own as large amount of business as it can relate to the transportation industry and selling vehicles is much more profitable that is selling rides.
Services of RenRenChe will be available soon on the Didi app, exposing used cars to the company’s more than 17 million ride-hailing drivers.
Another analyst based in Beijing, said she could see drivers at Didi selling their vehicles on RenRen.
Investing in RenRen gives Didi another way of influencing the transportation industry, said analysts, with the company having invested millions of dollars already into Ofo the bike-sharing business in China in early 2017, and has signed partnerships with other firms across the globe in the ride-hailing business.
Didi, which had been valued earlier at $50 billion, brings additional strong financial backing to the used car platform. Tencent the internet giant based in China is an investor as well in the RenRen, which invested over $85 million two years ago.
Didi did not comment on the current valuation of RenRenChe or what the stake’s size was that it was given in exchange for the investment of $200 million. RenRenChe was not available to make a comment.
Didi was founded in 2015 when Kuaidi Dache and Didi Dache, two ride-hailing apps merged. The company head is Cheng Wei, a former manager with Alibaba who was the founder in 2012 of Didi Dache.