Chinese ride-hailing giant Didi has lost 30 per cent of its app’s daily users since its $4.4bn IPO in New York at the end of June, in the latest blow to the company following Beijing’s harsh regulatory crackdown for an alleged data breach.
Didi’s average daily users plunged to 10.9m in August from 15.6m in June, according to data from Chinese mobile data tracker Aurora Mobile, first reported by the Financial Times.
Meanwhile, its main competitors either experienced a surge in user numbers or a similar fall, as regulatory fears weighed on the Chinese tech industry.
Beijing’s authorities opened an investigation into Didi for allegedly violating user privacy just days after its $4.4bn debut on the New York stock exchange in June, sending share prices tumbling 40 per cent and collapsing co-founder and CEO Cheng Wei’s net worth by around $1.2bn.
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The fallout from the investigation has hit Didi’s business hard, in part due to the regulator imposing a ban on new customer sign-up which is depriving the app of about 4m new users a month, based on its usual rate.
But US shareholders are yet to find out the extent of the damage, as the company has held off reporting its second quarter earnings – lagging behind most of its Wall Street peers.
Shortly before launching its Didi probe, China’s digital regulator the the Cyberspace Administration of China (CAC) announced that Chinese firms with data on more than 1m users will face security checks before they can list on foreign stock exchanges.
This is coupled with China’s broader regulatory crackdown in recent months on Chinese tech giants and other business sectors including education for perceived monopolistic behaviour and unfair competition.
Xi Jinping’s government is concerned about listings in the US, where over 30 Chinese firms raised a record $12.4bn in the first half of this year, according to data from Dealogic.
But Beijing’s recent campaign against offshore listings of Chinese companies in the US has caused foreign investors to doubt the prospects of Chinese companies that IPO on Wall Street and in London.
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The ongoing probe led Didi to call off plans to launch its app in continental Europe, including UK cities, at the end of last month.
A Didi spokesperson said: “We continue to explore additional new markets, liaising with relevant stakeholders in each and being thoughtful about when to introduce our services.
“As soon as we have any more news on additional new markets, we look forward to sharing.”
“We have established an international talent hub in the UK, recognising the exceptional quality of people in the market. Beyond that, any personnel matters remain strictly confidential.”
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Didi has been asked for comment.