Didi’s ChengXin YouXuan Preferred Headquarter Relocation, Reducing All Employees’ Salaries and Eyeing Profit
ChengXin YouXuan, an e-commerce platform under ride-hailing giant Didi Chuxing, moved its headquarters from Chengdu to Beijing and Hangzhou at the end of July. The firm then moved on to weaken the functions of its headquarters and cancelled the extra salary of employees. Their major business goal has also shifted from pouring money into business growth to pursuing profits.
After the closing of the former Chengdu headquarters, the functions of ChengXin YouXuan’s headquarters have been greatly weakened. The headquarters currently is only responsible for product research and development, data analysis. Decision-making is delegated to nine regions.
Ongoing adjustments also include the abolition of so-called “wartime subsidies”. Previously, in order to motivate employees, ChengXin YouXuan used to give 20% extra monthly salary as a “wartime subsidy”. Since August, the subsidy has been canceled, which means that all employees are facing salary reductions.
Established in April 2020, ChengXin YouXuan is a community e-commerce platform owned by ride-hailing giant Didi. In the second half of 2020, community group buying expanded rapidly, and Didi, Meituan, Pinduoduo, Alibaba and JD.com entered the market one after another.
According to Didi’s prospectus, ChengXin YouXuan conducted A1 and A2 rounds of funding and issued convertible bonds in March, obtaining $900 million and $200 million of funding from SoftBank and capital infusion respectively. Didi’s shareholding ratio was correspondingly reduced to 32.8%, thus exempting the obligation of consolidation.
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IT Home reported that in November 2020, ChengXin YouXuan announced that its daily order volume exceeded 7 million orders. At the beginning of the same month, Cheng Wei, CEO of Didi, said at an internal meeting that there was no upper limit on the investment in ChengXin YouXuan if the goal was winning the first place in the market. One month later, its daily order volume exceeded 10 million, but since then, this data has been kept strictly confidential and is no longer disclosed to the public.
On the morning of August 4, the Wuhan Municipal Market Supervision Bureau talked with seven major community group operators including ChengXin YouXuan, demanding them to ensure stable market prices during the pandemic.