NavInfo (SZ:002405) was once AutoNavi’s direct competitor when their target customers were businesses, not end-users. Apart from serving clients like automobile makers, NavInfo sold map data to Chinese digital maps, including Baidu Maps and Tencent’s Soso Maps. AutoNavi decided to shift focus to consumer-facing services with the launch of Amap, a free map app, in mid-2011.
NavInfo and a few other mapping companies have been sticking with business clients. Till yesterday. NavInfo announced a location-based service for end-users. Its name Jiujiner means counting on something nearby –Like most maps-based services, it helps users find merchants nearby.
It seems Jiujiner plans to do more for merchants to reach more target customers. NavInfo said they’d help improve the ROI of ads or promotional information to make a change in mobile advertising.
NavInfo reached partnership with Bsatinfo, a mobile solution provider who has been working with offline merchants, counting on the latter to have those merchants get on board.
Critics think NavInfo is too late to compete with AutoNavi who has more than a hundred million app users and partnered with consumer Internet giants like Alibaba and Qihoo.
But NavInfo has to change.
After the day Baidu and AutoNavi announced to offer their navigation apps for free, NavInfo’s shareholders started dumping stocks. It’s for sure that NavInfo’s revenues from navigation products would be greatly affected no matter its products are sold to businesses or end users– AutoNavi itself will lose money there, too.
Even before the announcement by Baidu and AutoNavi, NavInfo saw threats from the consumer-facing navigation products which were sold at much lower prices. In the first half of 2013, its total revenues, operating profit and net profit decreased by 12.67%, 87.89% and 60.07%, respectively. The increase in map data sales couldn’t compensate for the loss on navigation products, according to the company’s financial release.
Isn’t there another way around rather than entering the consumer market to compete with the experienced players? Like Internet veteran Zhou Hongyi argued, products with little cost in reproduction would eventually be offered for free and a users base is the field for business models to grow in. The mapping companies must have spent a lot of money on collecting data and developing products, but reproducing them costs little.
It’s also possible NavInfo just wants to test the water but still focuses on developing other products for businesses who’d always like to pay. Or, its goal is to provide good services to merchants on its platform so that they can charge them directly or make money off them through marketing services.