The investors set the drip fast?

February 25 news, recently, dropping a taxi with a quick taxi jointly issued a statement announcing two strategies to achieve a merger. Investors said the drop and quick merger, not only the fierce fighting in the taxi market to be integrated, will also produce a network effect of the absolute leader, this area has the hope that the next billion-dollar company.

 
Both investors believe that drops and fast mergers are good news for users, companies and investors alike. Why would you set up two former rival companies to merge, mainly based on three considerations:
 
First, the localization advantage.
 
Drop investor GGV GGV Capital Jixun said the O2O sector is changing our daily necessities on an as-needed basis, especially the two high-frequency areas of food and line, most of which are based on a judgment, on-demand service is a service that starts with local demand, This means that the 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. Drip and fast are from the low-end but high-frequency taxi services into the market, from the bottom up to provide more services, beginning last year, drop and fast have launched a car, improve the travel services.
 
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 of this requires a service provider familiar with the local market. So for traffic, localization service providers are the most likely winners.
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Second, the network effect advantage.
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The industry that follows the network effect, the first-priority advantage is valuable. In the taxi industry, the drop is the first hair, followed by the fast. 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.
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Jixun believes that not all consolidation brings the effect that consolidation does not give the leader an absolute advantage in a content-driven industry. The more far-reaching advantage of dropping and fast mergers is that two companies can stop subsidizing and truly innovate.
 
"Excessive competition is not the best development for the company, excessive competition involves a lot of waste, and only by reducing the waste can the company have the opportunity for real innovation".
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Finally, the next Chi company.
 
Jixun realizes that when the taxi software becomes a high frequency entry, it can provide a full range of travel services, drip and fast hope to build the whole way of integration, covering from the bus and the subway to the taxi and limousine all the way.
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Consolidation can reduce the waste of unnecessary resources, devote more resources to product innovation, red envelopes and subsidies may be less, but products will bring more value to users. In the future, drop fast not only can provide users with more optimized car and more convenient taxi, more importantly, this entrance can create more value for users, this is a 50 billion to 100 billion dollar opportunity.
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Jixun also stressed that the biggest challenge after both mergers and acquisitions is the two-team comb, which is also the focus of the next six months of work. 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.
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The future of the taxi software
 
Fast investor Jingwei Venture says 2014 taxis can be done because of the high-frequency service; another trend in 2015 is that high-frequency services in the lap of traffic and orders, will gradually introduce low-frequency but more profitable services, which is also a trend of existing O2O in 2015.
 
2015, this field of entrepreneurs can consider from the close to daily life, the liberation of craftsmen, strengthen infrastructure, High-frequency hit low-frequency four dimensions to do a good service. With the rapid development of mobile Internet to accelerate the integration process under the line, more and more investment opportunities in the Internet and the combination of traditional industries, Jingwei believe that the O2O field in the future will have the opportunity to create more industry segments of the Giants.