China’s Baidu confirms Uber investment plan
CHINESE internet giant Baidu confirmed yesterday it is buying a stake in fast-growing international car-hailing service Uber as the pair chase growth in one of the world’s largest transportation markets.
The companies did not disclose how big a stake Baidu is taking, nor how much it is paying for the investment, announced jointly in Beijing.
Baidu and Uber said they would collaborate to expand Uber’s presence in China. Uber, though, is a comparative latecomer in China, where taxi app users are set to triple to 45m by 2015 compared with 2013, according to Chinese research firm iResearch. Domestic firm Kuaidi Dache and Didi Dache, backed by tech giants Alibaba Group and Tencent Holdings respectively, have 90 per cent of the market sewn up.
“China is the Holy Grail because it is both elusive and attractive at the same time,” said Kumar Saha, an automotive and transport analyst at Frost & Sullivan.
Uber does have a presence in mainland China already, but it’s tiny, with operations in just eight cities. By contrast, Kuaidi is already in over 350 cities, while rival Didi recently raised $700m (£447m) to fund expansion.
Baidu is the latest big-name investor in Uber, joining the likes of Goldman Sachs and Google, to place a bet on the fast-growing transportation company, now valued at a hefty $40bn. However, Uber’s aggressive growth has already been accompanied by some negative publicity.