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China's Shouqi goes overseas to fight ride-hailing titan Didi

State-owned taxi company broadens reach to travelers in Europe, greater Asia

Chinese taxi company Shouqi is known for its black cars and drivers who open the door for passengers.

SHENZHEN -- Beijing Shouqi Group will launch car-hailing services via a mobile app in Southeast Asia, Europe and elsewhere targeting Chinese travelers, with hopes of catching up with industry giant Didi Chuxing.

The app from the group's Shouqi Limousine and Chauffeur unit currently works in 48 cities within China. But the expansion will make the service available in 217 cities across 30 countries this month, with the company reaching 1,500 cities in 130 nations by the end of September. Japan is not part of the expansion at present.

Narrow focus

Professional drivers and tour guides of Chinese heritage who possess knowledge of local destinations are being registered as drivers for the service in Europe and in Southeast Asian countries including Thailand and the Philippines.

The drivers, recruited with help from travel agencies, will transport customers between airports and hotels, as well as for sightseeing trips. Shouqi also is developing package deals including car service with partners such as China Comfort Travel Group.

The service will focus on capturing demand from Chinese travelers. Last year, 122 million tourists from China traveled abroad, a tally seen topping 200 million in 2020. Around 60% travel on their own rather than be part of organized tour packages, a factor lifting demand for car service at these destinations.

Shouqi expects earnings growth from its strategy targeting middle- and upper-income Chinese. The company hopes those who use the car service for the first time abroad will continue using it back home. The vast Chinese market for ride-hailing apps reached 132.7 billion yuan ($19.8 billion) last year, and research company Analysys projects it to more than triple to 460 billion yuan in 2020.

Shouqi was established in 1951 and named by former Premier Zhou Enlai. The venerated state-owned enterprise provides transportation to those attending or supporting the National People's Congress, as well as for government leaders from around the world. The major taxi company is known for its classy fleet of black foreign-brand cars, and its drivers open and close the vehicle doors for passengers.

The company's service sometimes costs more than double that of Didi, which uses amateur drivers. But active users increased fivefold from January to 3 million in June, and Shouqi seeks to accelerate growth further.

Other players

Shouqi is not the only challenger trying to gain ground in the field, and these rivals look to enhance service quality as they combat Didi's dominance in China's growing market for car-service apps.

Beijing-based Yidao Yongche's app has added a feature to let travelers from regional cities move faster through arrival security screenings when they book its car service in advance. The company's veteran drivers and amenities in the vehicle, such as water and tissues, also are highly regarded.

Fellow contender Ucar effectively gives a discount, as users are credited for 120 yuan when they charge 100 yuan via the app. The company also offers priority services in collaboration with financial institutions to cement its customer base.

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