Why will set drop a taxi and quick taxi Two of the former death of the company to merge?

Donews February 14 News (reporter Yu Vivi) February 14, drop a taxi and quick taxi joint release statement, announced two to achieve strategic 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. The reason for the merger of two former rival companies is mainly based on three considerations:

First, the localization advantage.

Drop investor GGV GGV Capital Jixun said the O2O field is changing our daily necessities in a holistic manner, especially in the areas of food and services, most of which are based on a judgment that service on demand is a service based on local demand, which means that winners are companies that are better suited to localization needs.

Taxi software is the most obvious example, in different areas, taxi software is a different way to cut 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 these require a service provider familiar with the local market. So for traffic, localization service providers are the most likely winners.

Secondly, the network effect advantage.

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. 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.

Jixun believes that not all integration will bring such an effect, in the content-driven industry, integration does not give the leader the absolute advantage. 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 will the company have the opportunity to make real innovations".

Finally, the next Chi company.

Jixun realized that when the taxi software became a high frequency of the travel entrance, can provide users with a full range of travel services, drop and fast hope to build a full way of integration, covering from the bus and subway to the taxi and limousine all the way.

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. 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.

Jixun also stressed that the biggest challenge after the merger is two teams combing, this is the next six months of work focus. 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.

The future of Taxi software

Fast investors Jingwei Venture said that 2014 can be done by taxi, because it is high-frequency service; another trend in 2015 is that high-frequency services, after the cycle of traffic and orders, will gradually introduce low-frequency but more profitable services, which is also a trend of existing O2O in 2015.

2015, entrepreneurs in this field can be considered from 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. Finish）