Didi Global, a Chinese taxi-hailing company, announced that it suffered a 19% year-over-year decline in revenue in 2022 as a result of regulatory crackdowns and COVID lockdowns throughout the nation.
The Largest Regulatory Fine for a Chinese Tech Company
Since the company was delisted from the US market last year, Didi stated in its first annual report that the COVID-19 pandemic outbreaks that struck its China company in the second and fourth quarters of 2022 were the main reason for the decline in its total revenue to 140.79 billion yuan ($20.37 billion) last year from 173.8 billion yuan in the previous year.
Last year, China imposed severe COVID restrictions across the nation, which severely hurt its economy. However, in December of last year, those limitations were lifted.
Aside from the COVID restrictions, Didi Global was under an 18-month ban imposed by the Cyberspace Administration of China following a more than a year-long regulatory crackdown on the company due to violations of cyberspace security. The investigations began just days after the firm held an initial public offering in New York in the summer of 2021.
As a result of the ban, many of its apps were removed from popular app stores and the company was delisted from the United States. The company was also fined 8.026 billion yuan ($1.2 billion), the largest regulatory fine ever levied against a Chinese tech company.
At the end of the financial year, Didi’s China mobility division posted an adjusted loss of 1.5 billion yuan before interest, tax, depreciation, and amortization, as opposed to adjusted earnings of 6.1 billion yuan in 2021, the firm stated in its report. This was partially due to the penalties.
However, it is only in January this year when the ban was lifted that Didi was able to resume the registration of new users as well as make its primary app available for download in China, resulting in a more upward trend.
On the bright side, despite difficulties in the Chinese market, Didi claimed that it was still also able to grow its overseas company, which mostly comprises ride-hailing and food delivery services. While gross transaction value decreased by 20% in China in 2022, it increased by 32% abroad.
The company additionally saw its net loss decrease by more than half last year. According to the report, Didi attributed the reduction of its net loss from 49.34 billion yuan in 2021 to 23.78 billion yuan to factors like investment gains.
In addition, the Beijing-based company has stated that the first months of this year have seen a return to growth, citing a quick recovery in travel across China following the lifting of COVID curbs. For instance, Didi’s daily transactions for China Mobility increased to an average of 28.2 million in March, up 42% from the same month last year.
Didi’s RoboTaxi and Kargobot
The company also presented the first prototype of Robotaxi, dubbed Didi Neuron, earlier in April. The blue and white minibus-like vehicle, which was unveiled by Didi Autonomous Driving COO Meng Xing, has robotic arms inside that are designed to assist passengers with carrying bags and restocking water bottles.
Didi also introduced a brand-new venture called Kargobot, which will combine autonomous driving with logistics and freight transportation. Kargobot will make use of Didi’s autonomous driving platform which has been running since 2021.
These new products and services are expected to boost the financial status of the company which currently boasts 587 million annual active users and 23 million annual active drivers worldwide as of the end of March.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.