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Didi, The Chinese Food Delivery App Finding Its Tasty Niche In Latin America

Didi Food, a delivery startup that struggled in East Asia, has found a growing market in Latin American cities, where appetite for home deliveries has yet to be fully satisfied.

Photo of delivery worker for Didi Food

Didi Food service in Costa Rica

Gwendolyn Ledger

SANTIAGO DE CHILEBarranquilla and Soledad are the latest Colombian cities to join the Chinese delivery firm Didi Food's expanding market in Latin America.

The firm began exploring partners here months ago, but announced its "arrival" online in late June once it had a critical mass of eateries and partners registered with it. The application is available in other Colombian cities, as well as in Mexico, Brazil, Costa Rica, Chile and the Dominican Republic.

"We think there's an incredible business opportunity in the Barranquilla area," Catalina Arteaga, head of regional business development, told local papers on June 28.

A post-pandemic boom

In May, the firm began operating in the cities of Cartagena, Cúcuta and Bucaramanga, which were crucial to its expansion in Colombia.

Mexico was Didi Food's first port of call in this part of the world in 2019, when it began expanding outside China. The firm told América Economía that in just over two years of activity there, Didi Food has become the platform with the "most options, with more than 50,000 registered restaurants and 80,000 delivery partners using the app to receive orders." The firm has become the most downloaded food and drinks application in iOS and Android phones, says María Pía Lindley, head of Didi Food for Mexico, Colombia, Central America and the Caribbean.

She says the application came to Costa Rica in August 2021, growing swiftly in the capital and its environs within three months, in a post-pandemic recovery phase. The vast majority of registered businesses there, she said, were small eateries, which Lindley said Didi had helped bring online. She said that 56% of businesses on its app were using an online delivery service for the first time.

Lessons from the street

The difference between Didi Food and other food delivery applications may be its entry into the sector through transportation. In that sense, it is similar to Uber Eats, which emerged from Uber. For Didi, transportation was a way of getting to know the local market and its consumer dynamics.

Lindley says Didi launched its food delivery app in Colombia in August 2021, two years after successfully working a shared rides application there. In Chile, it also launched in 2019. The ride-hailing app "allowed us to quickly acquire a regional view of the needs and potential improvements for residents in that area, which we could implement in our expansion across the national territory," they added.

Didi Ride thus allowed Didi Food to make a "soft landing" in Santiago in April 2022. Lindley says that in any location, the right density is needed to ensure the best experience for all sides involved with its service — customers, delivery partners and restaurants. She said Didi wants to provide the same service and choices in new locations as it does in established markets like Mexico or Brazil.

The firm cites the absence of a service fee for users as one of its advantages, alongside a lower-than-average fee charged to restaurants. It says it helps its drivers by easing and optimizing their access to and use of its application.

Photo of delivery workers waiting for orders outside supermarket i

Home delivery workers preparing their orders outside a supermarket in Cali, Colombia

Nano Calvo/VW Pics/Zuma

From Asia to Latin America

The original taxi firm (Didi Chuxing) began in February 2015 with the backing of Alibaba, an online retail giant. By May that year, it was operating in 360 Chinese cities and coordinating a million trips a day. The firm launched Didi Food in April 2017, though its expansion in Asia has not always been smooth. In Japan, it shut down in April 2022, two years after its arrival there. Part of the problem in Asia, including in China, is existing stiff competition from other firms like Meituan, Ele.me, and even foreign brands like Deliveroo or Grab.

Barros said Didi Food now had a vast turnover, which aided efficiency in its services.

So expanding into markets further afield made sense. In Chile, it has a "big potential," says Salvador Barros, a co-founder of Kipp, a Chilean tech and logistics consultancy.

Barros said Didi Food now had a vast turnover, which aided efficiency in its services. In time, he said, it could really compete with firms like Uber Eats.

Rocío Franco, a logistics analyst with consultants Euromonitor International, says several factors aid this sector in Latin America. Firstly, he said, food deliveries remained quite cheap here, compared to regions like Europe or North America.
Early in the pandemic, Euromonitor saw Latin America as the fastest growing region for deliveries, after the Asia-Pacific region. A report it published in May 2022 found the entire home delivery sector in Latin America to have raked in over U.S. $16.2 billion in 2021, almost 13% more than in 2020. The biggest growth was in Chile and Brazil.

A challenge in any new market is to win customer confidence. In Barranquilla and Soledad, the firm is financing 30-50% discounts on different types of orders for a limited period after its launch. Daniel Serra says intermittent offers and constant, competitive prices are likely to become Didi Food's hallmarks.

Of course, other firms, like Rappi, the Brazilian iFood, Glovo, Uber Eats and others, follow similar principles.

Is the market saturated?

So is the home delivery market in Latin America saturated, or is there room for more firms?

Our consultants said there was room, especially if firms concentrate less on the region's vast capital cities and move into smaller cities where home deliveries had yet to be fully developed.

In Didi's case, linking its cab and food delivery services may serve it well and optimize use of resources. Another factor in its favor is timing, thanks to a pandemic-induced increase in remote work.

Once the Latin American home delivery market matures, says Barros, profitability may fall but it will stabilize. In that case, he says, Didi Food's cost-cutting efficiency may become its big advantage over competitors.

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Why Crimea Is Proving So Hard For Russia To Defend

Ukraine has stepped up attacks on the occupied Crimean peninsula, claiming Monday that a missile Friday killed the head of Russia's Black Sea fleet at the headquarters in Sevastopol. And Russia is doing all within its power to deny how vulnerable it has become.

Photograph of the Russian Black Sea Fleet headquarters in smoke after a Ukrainian missile strike.​

September 22, 2023, Sevastopol, Crimea, Russia: Smoke rises over the Russian Black Sea Fleet headquarters after a Ukrainian missile strike.

Kyrylo Danylchenko

Russian authorities are making a concerted effort to downplay and even deny the recent missile strikes in Russia-occupied Crimea.

Stay up-to-date with the latest on the Russia-Ukraine war, with our exclusive international coverage.

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Media coverage in Russia of these events has been intentionally subdued, with top military spokesperson Igor Konashenkov offering no response to an attack on Russian Black Sea Fleet headquarters in the Crimean city of Sevastopol, or the alleged downing last week of Russian Su-24 aircraft by Ukrainian Air Defense.

The response from this and other strikes on the Crimean peninsula and surrounding waters of the Black Sea has alternated between complete silence and propagating falsehoods. One notable example of the latter was the claim that the Russian headquarters building of the Black Sea fleet that was hit Friday was empty and that the multiple explosions were mere routine training exercises.

Ukraine claimed on Monday that the attack killed Admiral Viktor Sokolov, the commander of Russia's Black Sea Fleet. "After the strike on the headquarters of the Russian Black Sea Fleet, 34 officers died, including the commander of the Russian Black Sea Fleet. Another 105 occupiers were wounded. The headquarters building cannot be restored," the Ukrainian special forces said via Telegram on Monday.

Responding to reports of multiple missiles strikes this month on Crimea, Russian authorities say that all the missiles were intercepted by a submarine and a structure called "VDK Minsk", which itself was severely damaged following a Ukrainian airstrike on Sept. 13. The Russians likewise dismissed reports of a fire at the headquarters of the Black Sea Fleet, attributing it to a mundane explosion caused by swamp gas.

Kremlin spokesman Dmitry Peskov has refrained from commenting on the military situation in Crimea and elsewhere, continuing to repeat that everything is “proceeding as planned.”

Why is Crimea such a touchy topic? And why is it proving to be so hard to defend?

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