Why did Uber redesign its logo? The reason may have been made in China.
Uber redesigned its logo recently. Wired did an extensive feature on the change, where Uber’s CEO Travis Kalanick talked about how Uber was originally designed as a luxury brand and its present day ethos and product philosophy don’t match the earlier vision any longer, and hence the change.
However, another explanation behind Uber’s logo redesign can be this being an Uber tactic, in trying to fight against Didi-Kuaidi in China. While Uber seems like a global behemoth and it literally rules the app based rides market in the Western world such as US and UK — it has become very much a minnow in the China market with 87.2% market share being dominated by its competitor Didi-Kuaidi, a company formed by the merger of China’s largest internet companies — Tencent and Alibaba backed taxi app companies.
Uber has publicly said China is its number one market in terms of rides, and its CEO Travis has repeated many times that he definitely intends to win China. Even though historically most of other western companies have badly struggled in China (Google, Facebook, Ebay to name a few), Uber seemed like it was going to be different this time when it claimed to garner 50% of the app based non-taxi rides market share in June 2015. It even partnered with Baidu and took investments from local investors in China, so that it doesn’t run afoul of any Government regulations and get blocked in the process.
However, what it probably didn’t account was that its primary competitors Didi-Dache and Kuaidi-Dache would merge, an unlikely possibility then, as these two were backed by the great warring internet giants of China, Tencent and Alibaba respectively. For years, Tencent and Alibaba have been intense competitors in China, with Alibaba ruling the e-commerce market and Tencent ruling the social, messaging & gaming market. The fight had become more fierce with Tencent hitting gold in last few years with its mega-hit product WeChat, the multi-functional social messaging app, followed by it garnering a strong foothold in China’s e-commerce market with Tencent buying a major stake in JD.com, China’s biggest e-commerce player after Alibaba, in 2014— and integrating the same into WeChat. However, in face of Uber’s strong show in China and rising funding costs, Alibaba and Tencent decided to forget their differences and merged their ride based app offerings, forming Didi-Kuaidi in process.
With the promotional reach of Tencent (860mn monthly active users of QQ messenger, 650mn monthly active users of WeChat) and Alibaba (400+ million users of Alibaba e-commerce portals and 270 million users of Alipay) products and the humongous war chest of $3 bn+ funding, it wasn’t a surprise that the merged entity, Didi-Kuaidi has gone on to capture the majority of China’s app based rides market. An estimate puts the combined entity as having 87.2% market share of the market.
Add to the above, Chinese companies in general are extremely aggressive, nimble and fast-movers due to lesser trademark and intellectual property protections in China. While the Western companies usually lament this as an entry barrier to China market, the lack of IP and trademark protection rights also means that Chinese companies usually copy ideas aggressively from each other, develop on them a bit, and release them to the market faster to win over consumers. In fact, even a leader like Tencent has been very open about its approach to pick the best ideas in the market, and bundle inspired offerings into its social products. This overall process of “copy->improve->release to market->iterate” leads to a much faster evolving consumer choice market — something which may suggest the reason behind the huge rise of Shenzhen ecosystem, which has almost entirely taken over the global Smartphones hardware and semiconductors industry with only selected elements of industry now remaining in US (due to Apple), Taiwan and bits of Korea and Japan.
Coming back to the point of Chinese companies following aggressive market tactics, the leader of app based rides market in China, Didi-Kuaidi redesigned its logo in September 2015, and many pointed it to being very similar to Uber’s logo. One can even call it a guerrilla warfare tactic against a well known western competitor — something Ebay learned the hard way when it lost a costly war in China against Alibaba. In the present scenario, despite being the leader, it seems Didi-Kuaidi didn’t want to rest on its laurels, lest Travis raises another big round and starts another price war for domination over Chinese consumers.
Many research studies say that Internet usage is habit based, despite western companies like Google repeatedly claiming against antitrust commissions that rival search engines and Internet services are only a click away from users. Most users habituated to Google search would never use Bing, even if Bing might hypothetically be a better search engine for certain search keywords, as it would involve Google habituated users learning a new interface and go through an entire new learning curve — a huge friction to Bing’s sampling and adoption.
For last few months, post its redesigned Uber-like logo, Didi-Kuaidi now owns 87.2% rides market in China — which means most Chinese users would only be using Didi-Kuaidi services. With Uber’s logo now looking like a copy of Didi-Kuaidi, one may argue consumers may in fact start thinking of Uber like a Didi-Kuaidi-X service (a lower grade version of Didi-Kuaidi, modelled on Uber X analogy).
If we take above reasoning to its final conclusion, it seems to reason that Travis Kalanick, the biggest hustler of today’s tech world, wouldn’t accept this situation. While a logo change seems like a big change, Uber doesn’t have to worry much about it in the Western world. As against a consumer packaged good brand logo change (e.g. Pepsi changing its logo), where brands have to ensure their consumers properly recognize and identify their logo transition, lest they get confused in supermarket logo aisles and pick a competitor’s product instead; Uber’s logo change wouldn’t hurt it a lot in Western markets as its app is already installed on most of its target users phones — where its app logo would be updated on the fly because of App store based push updates. With a high frequency of usage and it bordering on a daily utility service for a high percent of its users — Uber wouldn’t have any problem educating and converting its Western market users to the new logo identity.
However, China is where Travis Kalanick thinks the next big future for Uber lies, and how he plans to support its $62.5bn valuation. If Didi-Kuaidi has decided to fight a guerrilla warfare against Travis, he’s fighting it back being with a well known Suz Tzu’s art of war tactic “appear strong no matter how weak your hand; and move to uneven terrain if an aggressor is overwhelming.” By changing its logo, Travis knows that that Didi-Kuaidi won’t try to copy its new logo this time around — because the move would be apparent to everyone this time including the media and consumers, showing Didi-Kuaidi in a position of lesser strength.
While this entire reasoning may seem far fetched, one shouldn’t forget that this entire logo redesign exercise is the brainchild of Travis Kalanick where he has almost designed the new Uber logo himself — suggesting it’s a key part of solving the growth struggle to him. So, whether you like the new Uber logo or not is irrelevant, because it’s not made for you. It’s “Made for China”.
