Why Apple Invest in Didi with Josh Horwitz
In this episode, Josh Horwitz from Quartz joined us in a conversation to dissect why Apple has invested in China’s largest ride hailing app, Didi Chuxing and the implications for Uber in their plans to conquer China & the rest of the world. We move beyond the obvious reasons such as managing their diplomatic relations with the Chinese government and dived deeply to see how Apple is preparing their entrance into China similar to the other automotive makers and navigate the intricacies of the transportation industry regulation from the Chinese government. Last but not least, we also discussed the power players behind Didi and Grab and how the traditional “old” money are boiling into technology startups in Asia.
Here are the interesting show notes and links to the discussion (with time-stamps included):
- Josh Horwitz, Writer from Quartz (@horwitzjosh, LinkedIn, Quartz)
- What are the interesting news in Asia that Josh have covered recently? [1:12]
- The On-Demand Transportation Wars [2:09]
- Since our last conversation, what has transpired for the different dominant players: Uber, Didi, Ola and Grab/Go-Jek within the space? [2:28]
- Grab and Go-Jek founders sharing a common story [3:30]
- Uber vs Google Waze: What happened there where self-driving cars meet on demand transportation? [4:38]
- Apple’s US$1B investment into Didi and Didi vs Uber in China [8:34]
- Why did the deal happen? What are the potential reasons? [8:58]
- Is Apple’s investment in Didi really an investment into its own future?
- Does Didi need Apple? [13:22]
- A symbolic appeasement with the Chinese government or a way to buy “guanxi”?
- The Chinese government regulated the automotive industry since the 1980s and place strict restrictions to automotive OEMs with a 50:50 joint venture. [15:30]
- Example of 50:50 joint ventures in China’s automotive industries: car companies with state owned enterprises in China, for example, Ford has a joint venture with Changan. [17:00]
- How Apple will enter China with a car leveraging on a partner. What does Apple gain from investing in Didi?Counter example: Tesla is facing problems in China without a partner to sell their electric cars. [19:11]
- Didi used a varied interest company (VIE) business structure similar to Alibaba and how it affects its partnership with Apple. [20:00]
- What does that mean for Uber in the online transportation wars? [24:20]
- The power players behind Didi vs Uber and Grab [27:14]
- Didi: Who is Jean Liu who did the deal with Tim Cook from Apple and Wei Zheng, founder and CEO of Didi? (Btw, she’s the daughter of the Lenovo founder, Liu Chuanzhi – from forbes). Profiles of Cheng Wei and Jean Liu
- Uber China: Liu Zhen, director of strategy is cousin to Jean Liu. (Source: Forbes)
- Grab’s Anthony Tan – grandson of the founder of Tan Chong Motors, which own the exclusive distribution to Nissan, a Japanese automotive company.
- Jerry Yang, an advisor to Uber who did the deal with Alibaba when he was CEO of Yahoo! [28:50]
- Uber and leasing out cars – controlling the supply with the curious case in Singapore [29:51]
- Is Grab doing the same as Uber in controlling the supply with their competitive advantage with Nissan thru Tan Chong Motors?
- Does Didi need Apple? [13:22]
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The show is hosted by Bernard Leong (@bleongcw) and are sponsored by Ideal Workspace (Twitter, Facebook and LinkedIn) with their new Altizen Desk on Indiegogo (Twitter, Facebook, Medium). Also check out Ideal Workspace’s new standing desk, Altizen and sign up for their mailing list. Sound credits for the intro music: Taro Iwashiro, “The Beginning” from Red Cliff Soundtrack.
