Effects of droplet and rapid merger

Drop a taxi and a quick taxi merger, not only let the fierce battle of the taxi market to be integrated, but also produced a network effect of the absolute leader, this area has the hope that the next hundred billion-dollar company. As a drop-by-taxi and Southeast Asia's largest taxi software GrabTaxi investors, I firmly believe that the move on the field of travel will be a major subversion. Drops and fast mergers are good news for users, companies and investors. Now I'll talk about the reason for this judgment:

Localization advantages.

O2O domain is on-demand services (on demand service) in a way to comprehensively change our daily necessities, especially food and line of these two high-frequency fields, in the field of transport I invested in a drop of taxis, GrabTaxi, and raise car points. Most investments are based on a judgment that on-demand services (on demand service) are services based on local requirements, which means that winners are those that are better suited to localization needs.

Taxi software is the most obvious example, in different areas, taxi software is in different ways into the market. In the United States, Uber Black is high-end private car rental services, Uber to high-end services into the market, from the top down to enrich the service line and user base. But in China, the drop and fast are from the low-end but high-frequency taxi services into the market, from the bottom up to provide more services, starting late last year, drop and fast have launched a special car, improve the travel services. South-East Asia's largest taxi application GrabTaxi as an example, GrabTaxi is a taxi into the market, in addition to the local market demand derived from the downward grab bike and up grab car, to fully meet the needs of users travel.

Traffic is an extremely localized market that requires docking with local drivers and service providers, serving local users, and even facing local policies and regulations, so all these require a service provider familiar with the local market. So for traffic, localization service providers are the most likely winners.

Advantages of network effect

Some business has a strong network effect advantage, such as our early investment Alibaba, its Consumer-to-consumer platform Taobao is a typical example. Taobao gathered a large number of merchant resources, but also in the client formed an absolute network effect. This is the later why Taobao is difficult to replace, Baidu, Tencent have tried to test the business also have a taste of the end.

Follow the network effect of the industry, the first-hair advantage is valuable. In the taxi industry, the drop is the first hair, followed by the fast, then the bumblebee, and so on, although also very hard, but catching up with them is difficult, there are more drivers, the faster the taxi, the less likely to give up service to other platforms. So, drops and fast mergers can allow companies to gather and integrate existing resources, strengthen the advantages of network effects, provide users with more efficient services, and pull away from other competitors to become a undisputed market leader.

Not all integrations have the effect that in a content-driven industry, consolidation does not give the leader an absolute advantage. In the case of the combination of Youku and potatoes I've been involved in, after the merger, we stopped what we had expected, but on the other hand, the merger didn't stop the user's "flow", and the user would still choose another platform based on the content.

The more far-reaching advantage of the merger is that two companies can stop the subsidy war for real innovation. I agree with Peter Thiel in the "from zero to a" point of view, excessive competition is not the best company development, excessive competition contains a lot of waste, only to reduce these waste, companies have the opportunity to carry out real innovation.

Next Chi Company

In the process, we realize that when the formation of a high-frequency travel portal, can provide users with a full range of travel services, drops and fast hope to build a full way of integration, covering from the bus and subway to the taxi and limousine all the way, demand from the passengers, when you want to go to a place, You can turn on the app to find the most optimized solution. It will tell you the best travel advice from point A to B, and even include solutions to the best solution or shared mileage with other users.

So we are optimistic that the drip will become a gathering of users and drivers active traffic data platform, through accurate data matching and perfect network coverage to provide users with travel services, in the future, drop fast not only to provide users with more optimized car and more convenient taxi, More importantly, such portals can create more value for users, which is a 50 billion to 100 billion dollar opportunity. Mergers can reduce the waste of unnecessary resources, put more resources into product innovation, red envelopes and subsidies may be less, but products will bring more value to users. The merger is a great start for two companies with lofty goals.

Finally, the biggest challenge after mergers and acquisitions is two teams combing, which is also the focus of the next six months of work. After the merger of Youku and Tudou, the team combed into the most important thing in the company's merged six months. The challenge for a team to make a major adjustment is to leave the best talent, because in an unstable environment, the best talent is often the fastest. In my understanding of the drop of the team, Cheng Wei has Alibaba's management system and experience, Liu also has a wealth of management experience, I believe both partners and the original fast management team will lead the team calmly face the challenge.