Digital mapmaker aspires to create the 'Taobao of maps'

Digital mapmaker aspires to create the 'Taobao of maps'

An ad for AutoNavi Information Technology's HD Autonavi Navigation App.

Since April 2012, Baidu Maps, Google Maps, and Apple have provided a built-in voice navigational service, with Baidu even directly offering an offline version. As a result, AutoNavi — a domestic company provided location-based services and digital navigation — has been forced to slash the price of its navigation product to 6 yuan (US$1), down from the original 50 yuan (US$8).

An industry insider notes that with the offline map function, the new version of Baidu Map differs from AutoNavi navigation only in the capability of the latter in offering navigational services without an internet connection, since its computing engine is located locally, while Baidu can only provide navigational service with the internet connection, since its engine is cloud-based.

"Baidu doesn't place its computing engine locally because of opposition from its upstream data providers, as the practice would devastate businesses worth several billion yuan of many map enterprises," says the insider, adding that free-service mode is threatening the paid service of established map providers, such as AutoNavi.

Data from Analysys International show that in the third quarter of 2012, AutoNavi Map boasted a 25.9% share in China's mobile-phone map market, the highest, followed by Baidu Maps with 19.1% and Mapbar with 9.5%.

"Although AutoNavi became the Chinese-map provider over Apple last year and is still the leading map firm, Baidu Map is catching up, having gained nearly two percentage points in market share in the third quarter of 2012," notes Yin Jingxue, an analyst at Analysys International. The participation of internet firms has seriously challenged the market status of established mobile-phone map providers, triggering acute competition in the market.

Fortunately, mobile-phone maps are not the main income source of AutoNavi, which derived 59% of its revenue of US$40.2 million in the third quarter 2012 from in-car navigational systems, compared with 27.6% for mobile-phone and Internet service in combination.

Que Jianjun, vice president of AutoNavi, notes that navigational service is just the starting point for map services, which will become a portal for various services in the fields of eating, accommodation, and transportation. "Maps, rather than mobile-phone apps or internet browsers, are the optimal portal for various O2O (online-to-offline) services," remarks Que.

Que revealed that AutoNavi will focus on such fields as hotel, aviation, ticketing, travel/vacation, housing purchase, and car rental. He reports that the short-term goal of AutoNavi is to integrate various services, so that customers can access all kinds of services by just opening a map app. To achieve the goal, the company plans to cooperate with large numbers of O2O firms.

"In the future, every POI (point of interest) on the map will be a small website, which will be open to editing by stores for the release of services or sales of products, thereby transforming AutoNavi Map into a e-commerce website like Taobao," notes Que, adding that, "the difference is that ours are brick-and-mortar stores, while those on Taobao are virtual stores."