On February 10, Alibaba - the Chinese e-commerce giant - made a US$1.6-billion (Bt52 billion) bid for a 72-per-cent stake in AutoNavi, a digital mapping service in China.
Though merger and acquisition deals are common in the tech industry, Alibaba’s acquisition of AutoNavi, which was founded in 2001, could set the stage for its race to the next frontier: next-gen digital commerce.
In the past few years, digital mapping and location-based solutions have become highly sought-after by tech giants. Looking across the industry now, we can see similar moves.
Google has long been in the market, offering the world’s most popular service in this field, Google Maps. Apple has been aggressively pushing its Apple Maps service in the past few years, while Microsoft has also been in the arena for quite some time with Bing Maps.
Baidu, China’s largest search engine, launched a service similar to Google Street View, while Tencent – the owner of WeChat – joined the field with Tencent Maps, offering full-coverage mapping of China, even in remote areas.
So, what makes mapping services so attractive to these tech giants? Do consumers really want another map service, when the ubiquitous Google Maps would suffice?
To answer these questions, we have to also look at the rising megatrends in the tech industry. According to Frost & Sullivan research, megatrends at the centre of attention include artificial intelligence (AI), mobility, and the Internet of Things. Put these pieces of the puzzle together, and we are looking at the next-generation shopping experience.
As the centre of the digital world moves onto the mobile platform with social-media persona becoming the norm, marketing and commercial activities have become more personal to consumers than ever before.
With digital persona, online retailers have records of each user’s purchases. Social media gives online merchants an insight into a user’s personal information and network. Advanced AI can suggest the next purchase, in accordance with the user’s preference – and mobile devices allow users to connect to the digital world from everywhere.
In order to add the context-aware experience and elicit more transactions from the user, AI needs to know the person’s surrounding environment. A user can receive tailored promotional offers from nearby stores, or perhaps even make purchases directly through mobile apps.
A mapping system has become a crucial part in tying all these pieces together. It was such an important move when Apple once removed Google Maps from its iOS platform.
Meanwhile, micro location service is another developing trend worth watching. With technology such as Bluetooth LE in most mobile devices, the system can tell a user’s location to within just 2 to 5 metres.
It’s likely that in the next few years, the world will be using mapping services not only for directions, but as a key channel to provide location-based services to individual customers.
Combining macro mapping, micro location and mobile technologies with analytics, retailers can engage their customers at a much greater level of experience and intimacy than ever before.
Teera Kanokkanjanarat is senior ICT Industry analyst at Frost & Sullivan.