China’s tech and retail giants, Alibaba, Tencent and Suning have partnered with a host of automotive brands to launch a Chinese ride-hailing venture.
The venture, which will focus on new energy vehicles, includes automotive companies Chongqing Changan Automobile, FAW and Dongfeng Motor and is reported to be worth $1.5 billion, according to Reuters.
The venture will look to take share from China’s ride-hailing giant Didi Chuxing, which dominates the market with 90% of all bookings in China.
China is the world’s largest ride-hailing market and is estimated to be worth $23 billion, according to Reuters. However, the market is facing increased scrutiny and regulation following attacks on passengers, including a rape and a murder.
The venture will also compete with existing offerings from Chinese carmakers such as BMW, Geely and SAIC.
The automotive backers each have a 15% stake in the venture, while retailer Suning has a 19% stake. Alibaba and Tencent’s investment units, along with other investments funds, hold the remaining shares.
The launch comes hot on the heels of changes at Didi Chuxing which saw the company axe jobs and restructure in a bid to refocus its business around safety and compliance.