Why Didi Is Dominant But Still Unprofitable (Tech Strategy – Podcast 87)


This week’s podcast is about Didi’s upcoming IPO. They have released their numbers and it shows market dominance but operating losses. This is my explanation for what is happening. And what their strategic plan means.

You can listen to this podcast here or at iTunesGoogle Podcasts and Himalaya.

Here is the key paragraph from Didi’s IPO filing:

How I breakdown:

  • Market size and/or growth
  • Competitive strength and defensibility
  • Unit economics

Questions for network effects:

  • Local vs. regional vs. international network effects?
  • Fast vs. slow network effects?
  • Degree vs. value of connections?
  • Minimum viable scale vs. asymptotic scale? What is congestion / saturation / degradation scale?
  • Linear vs. exponential growth at different scales?


Related articles:

From the Concept Library, concepts for this article are:

  • Network Effects: Indirect
  • Economies of Scale: Purchasing Economies
  • 5 Forces: Substitutes
  • 5 Forces: Threat of New Entrants

From the Company Library, companies for this article are:

  • Didi

I write, speak and consult about how to win (and not lose) in digital strategy and transformation.

I am the founder of TechMoat Consulting, a boutique consulting firm that helps retailers, brands, and technology companies exploit digital change to grow faster, innovate better and build digital moats. Get in touch here.

My book series Moats and Marathons is one-of-a-kind framework for building and measuring competitive advantages in digital businesses.

Note: This content (articles, podcasts, website info) is not investment advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. Investing is risky. Do your own research.


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