LinkedIn took a step today to build up its presence in China, and China’s Uber rival Didi Kuaidi took a step to make more inroads into the U.S. tech industry: the two companies have signed a deal to form a strategic partnership covering product integration, technology, recruitment, and brand development.
The announcement was made during a large meeting today at the Microsoft headquarters in Redmond, where nearly 30 tech executives including Apple’s Tim Cook, Jeff Bezos from Amazon and Mark Zuckerberg from Facebook met with Chinese President Xi Jinping, as part of the U.S. China Internet Industry Forum. Other news out of the event included a deal between Microsoft and Baidu, where Baidu would become the default search engine for Windows 10 in China; and a JV between Cisco and Chinese server maker Inspur.
Under the terms of the memorandum of understanding between LinkedIn and Didi, there are several parts to the deal.
In China, Didi’s social ridesharing service Hitch will let users connect on the app using their LinkedIn profiles. Hitch opened for business in the country in June of this year and has managed to pick up 5 million users so far, the company says. Didi inked a deal with Lyft earlier this month, and Lyft itself acquired a startup called Hitch a year ago, but (somewhat confusingly) the Hitch in China is not related to that service.
While the main thrust of Hitch is ridesharing with other consumers to bring down the cost of the service, the idea here is that by integrating with LinkedIn, the service can also be used for professional social networking.
“By connecting with LinkedIn, Hitch will be able to enhance its networking function, particularly targeting professionals who represent a big part of its user base,” Didi noted in a statement announcing the deal.
Another part of the agreement, according to the MOU, includes developing algorithms and machine learning to “improve their user experience and create new market opportunities.” The companies do not spell out what this might entail exactly or where that research would be done. We have reached out to find out more.
In the U.S., meanwhile, Didi Kuaidi will be working with LinkedIn on recruitment. Specifically, Didi is interested in hiring more people to come work for them in China, and it will be using LinkedIn to help find them.
The agreement between the two companies speaks miles about where each hopes to go longer term.
On the side of LinkedIn, the company has made a concerted effort to build up its user base and operations in China since opening its first China-specific site in February 2014 — although some of that growth has attracted controversy because of its willingness to follow Chinese government restrictions.
In its last quarterly earnings, LinkedIn’s CEO Jeff Weiner cited China as a big growth driver for the company. LinkedIn currently has 10 million users in China, adding 6 million since February 2014.
But to put that number into context, the company has 380 million users globally. In other words, partnering with Didi Kuaidi could potentially help LinkedIn tie itself to a local business that is already very popular with consumers who are professionals — LinkedIn’s target demographic — to grow that base even faster, and provide a service that might compel Chinese LinkedIn users to log in and use its service more.
The fact that LinkedIn is offering sign-in services to Hitch users is also interesting in itself. This is an area that LinkedIn has been looking to develop more for a while as a counterbalance to Facebook’s social sign-in services, although much of its efforts have been focused on LinkedIn’s own services.
Whereas Facebook has largely cornered the market for social logins in the West, it has made less inroads in countries like China, and that leaves a window for LinkedIn as a Western competitor to local services.
On the part of Didi, the company has been a thorn in Uber’s side in China, where the two appear to be in a race to see who can raise the most money to duke it out locally. Elsewhere, Didi shares common investors with other Uber rivals like Ola in India and Lyft in the U.S.. It’s not clear how and if this deal is a signal of Didi expanding further in North America, but it at least seems to indicate that it will look to tap U.S. talent to grow its business overall.
Updated with more current figures for LinkedIn in China and clarification of the Hitch relationship.