Back to the complete issue
Friday, 5 August 2016

The reality of competition for US tech giants in China

Uber’s Chinese competitor Didi Chuxing is investing USD 1 bn in Uber’s global company to buy out its entire China operation, ending a price war that left Uber out USD 2 bn over two years, Bloomberg reported. The agreement sheds light on harsh conditions faced by US tech giants when entering the Chinese market. Since US tech firms were expunged in 2009 in favor of domestic alternatives, “a new Chinese tech order took shape,” writes Scott Cendrowski for Fortune. China’s Tech market is controlled by four players: Baidu, Alibaba, Tencent, and the government. The tech companies have expanded into every possible tech vertical, well before anyone in Silicon Valley did, while the government sets the rules and has amassed its own USD 340 bn venture capital fund.

Uber wasn’t just competing with domestic ridesharing applications, it was competing with government supported tech giants with deep pockets to support homegrown startups. Uber Founder Travis Kalanick tried to alleviate the government’s concerns with country visits and promises of employment and efficiency improvements in cities. He even got Uber backing from Baidu, the one company of the big three tech giants that wasn’t ultimately backing Didi. Tencent’s social network WeChat shut down Uber’s public hiring and services pages three times last year, and by August Uber had disappeared completely from WeChat.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.