Chinese Tencent and Huawei launch car rental platforms to boost ecosystems

(Yicai Global) July 27 — China’s carpooling market is expected to become increasingly efficient as tech giants Tencent Holdings and Huawei Technologies enter the industry to complement their other services.

Operator WeChat has launched Tencent Mobility Service and Huawei unveiled its Petal Mobility this month, Yicai Global has learned. However, the two Shenzhen-based companies do not directly compete with Didi Chuxing or Meituan as their respective platforms only seek rides from other car-sharing platforms.

Information symmetry can reduce prices. Competition is expected to accelerate as Huawei and Tencent enter the mobility services industry because they can provide users with unique solutions that entail better experiences, said Pan Helin, co-director of an economics institute. at Zhejiang University International Business School, Yicai. Global.

In Beijing, Tencent Mobility Service offers trips through three platforms, including Caocao Chuxing, Shouqi Limousine & Chauffeur and Sunshine Travel. The Shenzhen-based handset maker is offering service in Beijing, Shenzhen, Nanjing and Hangzhou until at least August.

The pair have indirect goals. “Huawei expects to sell more cars through the platform, and WeChat hopes to find a new way to take advantage of its large number of users,” an industry insider told Yicai Global.

Years of competition have held back growth in the car rental market, but what remains attractive is selling vehicles to users on these platforms, the aforementioned insider added. Huawei has partnered with many Chinese automakers to produce smart vehicles equipped with software made by Huawei.

Additionally, companies are looking to expand their ecosystems. The main objective is probably not a large market share in the car rental services market, but instead both companies are trying to optimize their business layouts by using their navigation tools in more scenarios , Chen Liteng, a digital analyst at 100EC.Com’s Electronic Commerce Research Center, told Yicai Global.

These measures provide a new approach for Tencent and Huawei to take advantage of their huge user bases, making their users more loyal to their companies, Chen noted.

The platforms are matchmakers. They connect users to service providers, Chen explained. Operators simply need to offer users a gateway to car rental services, a business model that is light on assets and operating costs, he added.

However, the business model has its limits. Platforms that integrate the services of other car rental platforms are limited by their lack of offline infrastructure, Pan said.

In the long term, these platforms will likely need to obtain commercial licenses for their operations, Chen said. In addition, the rights and obligations of third-party service providers should be defined more precisely, he added.

Editors: Tang Shihua, Emmi Laine, Xiao Yi