Crackdowns on big technology companies have been going on in China for quite some time now and the biggest Chinese companies like Alibaba have not been left out.
Giant ride-hailing service Didi is the most recent company facing a crackdown from Chinese authorities. Earlier this week, the Cyberspace Administration of China (CAC) ordered all app stores in the country to take down Didi’s ride-hailing mobile app. This was shortly after the company announced its debut in the New York Stock Exchange.
On Friday, the Cyberspace Administration of China (CAC) announced that it would take down 25 mobile apps that are being operated by Didi Global Inc. from app stores as the crackdown against the company continues.According to the regulatory body, these apps owned by Didi collected and used users’ data illegally. In its statement, the regulatory body said that the apps that were guilty of collecting data illegally included those the company used for its delivery services, camera device, and financial services.
When the crackdown was first mentioned, Didi reassured existing users that they would still be able to access Didi’s services and that the order to take down its app meant that they could not register new customers. This should still applyto its other apps – old customers should still be able to access services with the company unable to take new customers.
Didi raised $4.4 billion from investors from its New York stock listing about a week ago and had a market value of $75 billion. Didi shares fell 5.3 percent after the announcement by the Cybersecurity Administration of China (CAC) that it plans on reviewing the company.
Didi Global Inc. has lost approximately $22 billion in market value in three sessions this week. This stemmed from the fears and uncertainty about the company that was also as a result of the crackdown action against the company.
Did mentioned earlier that it expects that “the app takedown may have an adverse impact on its revenue in China” but analysts opined that the action should not affect the company’s earnings by much as its user base in China is large.
Ibhadojemu Lucky Emmanuel is a graduate of Education and Economics from the University of Benin. He has a passion for tech and business and has been writing professionally for over a period of five years. He's written across various topics and segments and knew tech-business was it when he first stumbled on it. He has a great passion for music and arts, and wants to visit as many countries as he can someday.
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