MOBILE MAPPING IN CHINASCP Model Analysis and Future

Prospects

PresentersTime

1

Aiur & Olivia & Xiaofan27/3/2014

AGENDA

•Background of Chinese mobile mapping market

•Analysis of Chinese mapping market in SCP Model

•Future Prospects

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BACKGROUND OF CHINESE MOBILE MAPPING MARKET

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DEFINITION OF MOBILE MAP

Mobile map is the application that uses mobile phone or other mobile terminal to view the map, position, search the location, and plan the route through WAP or other software.

Source: China Mobile Map Market Research Annual Report for 2013

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CHINESE MOBILE INTERNET USERS

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2006 2007 2008 2009 2010 2011 2012 2013(F) 2014(F) 2015(F)3,104 3,50310,049

20,51428,819

43,137

56,12065,895

74,89682,462

Prediction of Active user scale of China mobile

internet

Active users

faster than global market

Mobile mapping has become a new market darling

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Mobile ordering

Registration

Price parity

Mobile shopping

Recommendation information

Mobile mapping and navigation

13.60%18.20%20.50%22.70%22.70%25.00%

29.50%31.80%34.10%

52.30%67.10%

User's behaviors of mobile internet

source: Chinese mobile internet market research for 2013

Life service applications are getting more and more attention from users.

USER SCALE OF CHINESE MOBILE MAPPING

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2011 2012 2013 2014e 2015e 2016e0

1

2

3

4

5

6

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

1.6

2.5

3.3

4

4.75.262.20%

32.00%

20.70%16.90%

11.00%

User scale of mobile mapping and navigation(hundred million)Growth rate

Source: Chinese mobile mapping and navigation market research report for 2012

User scale of mobile mapping and navigation(hundred million)

DEVELOPMENT IN CHINESE MARKET

The first Internet map service was launched

Google map entered China and chose Autonavi as their partner

Mobile mapping service became homogenized. Competition became fiercer.

Small companies died. Survivors began to focus on O2O business.

1999

2007

2008

2010

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ANALYSIS IN S-C-P MODEL

StructureConductPerformance

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STRUCTURE C P

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S 1 MOBILE MAPPING INDUSTRY OF CHINA

CR4:76.1%

↓

Concentrated

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29.40%

22.70%17.40%

6.60%

5.90%

5.40%

12.60%

AutoNavi

Baidu Map

Google Map

Tiger Map

Mapbar

SoSo Map

Others

S 2 ENTRY BARRIERS

Government Policy

Only companies with qualifications can provide mapping business.

Database Provider

Chinese mapping industry is duopolisticAutoNavi & Navinfo

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S CONDUCT P

13

64.60%

20.20%

10.80%

4.40%

Are you willing to pay for the mobile apps?

C 1 PRICING POLICIES

Most mobile map apps are free. Main reason : Users have less willingness to pay for mobile apps. 14

33.80%

66.20%

Have you ever paid for the mobile apps?

Yes

No

No

Will buy if price is acceptable

Maybe

Will buy as long as I like the app

C 2 PRODUCT STRATEGY--AutoNavi

Contend for the

phone entrancemap social platform

Integrate with third parties

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C 2 PRODUCT STRATEGY--AutoNavi

The commercialization path

of AutoNavi map-based O2O

business ecosystem

high quality services

third parties

Establish LBS business ecology

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C 2 PRODUCT STRATEGY—Baidu Map

Accelerate the conversion from the local life entrance Baidu Map department → LBS business department

Baidu side's Guid Baidu tuan Integrate with coupon and group

buying information and access to their order Introduction of indoor positioning and location sharing Location Sharing Services

Interior map Cooperate with third-party applications

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C 2 PRODUCT STRATEGY—Baidu Map

Access to discount hotels Access to the daily discount hotel

inventory resources Enter to the discount hotels market

"Tonight Hotel Deals" section

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C 3 REVENUE MODEL

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The basic business model of mobile mapping industry

Mapping service

Users

Advertisers

C 3 REVENUE MODEL

Several characteristics1. Advertising.

2. Location-targeted advertisements.

3. Mobile and Internet location-based solutions for enterprises.

4. Pre-installing navigation software cooperation with mobile phone manufacturers.

5. Charge users for application download and advanced service.

However, in 2013, Baidu and AutoNavi Navigation started offering free service. New business model needs to be established.

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C 4 COMPETITION

It can integrate abundant resources provided by Alibaba

It has strong user base from its signature brand Baidu Search engine

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S C PERFORMANCE

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P 1 Mobile mapping user are increasing

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Sequential growth rate is 8.6%.

P 2 The status of the TOP 3 players is more solid

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FUTURE PROSPECTS

•Prediction of players

•3 trends that will drive the future

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PREDICTION OF PLAYERS--Leading Players

With the investment from Alibaba, AutoNavi will be supplemented to a great extend in terms of financial and talent resources

Mapping gets higher strategic status.

After acquiring 91Assistant and Nuomi—more power in mobile distribution and business resources.

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PREDICTION OF PLAYERS--Innovative Players

Good at innovation Short in finance and talent

Making good use of Wechat Higher status & Great ambition

No better in usability Lagging in O2O

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THREE FUTURE TRENDS

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1. 3D Live Map 2. Indoor Navigation

3. Personalized Product

THANK YOU

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