AutoNavi Wants to Build A Maps-based Taobao

by -
1

Interface of Amap

Qie Jianjun, vice president of AutoNavi (NASDAQ:AMAP), told Sine Tech lately, “There will pop up a minisite when any POI is clicked on. We’ll open the back-end system to merchants so that they can edit the webpage, post offerings or sell goods directly. Membership management features will also be available. The maps will be built to a business platform like Taobao.”

Before becoming a Taobao on maps, AutoNavi plans to become the gateway for consumers to find information about everyday life, eating, housing and transportation. “A mobile app or browser isn’t the best for lifestyle services, but maps the best entrance to all kinds of online-to-offline services”, Mr. Qie said. Now the company has had many offline merchants to join in the program and invited third-party Internet services like Ctrip to do business with those brick-and-mortar stores. As disclosed by its CEO, the company also plans to expand to other realms, vehicle dashboard and TV, with information of merchants and O2O services.

The next step is to become the Taobao on maps. The company plans to sell services and take CPS-based revenue shares to profit from the platform. “Different from Taobao, every merchant on Amap has a brick-and-mortar store. Also AutoNavi is able to push location-based information to users”, as Mr. Qie pointed out.

It just sounds too good. We all know how difficult it can be. Offline stores are numerous and they are changing all the time. A number of startups have been working on integrating merchants of vertical categories, such as restaurants. Payment solution must be another problem for AutoNavi.

Competitors are ambushing on its way to become the gateway for daily life information. Baidu merged Shenbian (“Nearby”), the location-based sharing and review service, into Baidu Maps last week. And the two services will form Baidu’s LBS division.

Of course Taobao had strong competitors, such as eBay, too when it dreamed big to build such a platform. There’s also possibility that Taobao will launch such a maps-based shopping product to compete with AutoNavi.

100 million App Installations 

AutoNavi announced that its Amap users surpassed 100 million last week. The number of real users, however, cannot be so big, as  the app is pre-installed in Samsung and other Android phones.

The company decided to shift to consumer-facing services, from offering maps to businesses like vehicle manufacturers, with the launch of Amap. As competitors, especially Baidu Maps, have been catching up in function and while offer services for free, AutoNavi’s Amap and paid navigation app are losing competitiveness.

While other consumer-facing maps apps are for free, AutoNavi has been making money there, not from users but from businesses. According to the disclosed prices for 2011, company received 10 – 15 yuan for every installation of the navigation app from cooperating Android phone makers and 2.5 yuan for every activation of that app in custom phones released by telecom operators. It also charges some businesses like 360Buy for specific services.

The CEO of AutoNavi expressed his confidence in monetizing its property, counting on value-added services. “The smaller, the more remote a merchant, the more reliant it will be on value-added services provided by maps-based apps.”