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Baidu, Alibaba and Tencent (BAT) bought five biggest Chinese navigation & map providers

by Kevin Li | May 14, 2014

After Tencent invested 1.173 billion RMB to acquire 11.28% of Navinfo, the three giant Internet service providers-Baidu, Alibaba and Tencent (so called ‘BAT’) are all somehow involved in the automotive industry. How did this happen?

 

Baidu acquired one of the two Beijing branches of RITU in September, 2013 to acquire RITU's navigation product 'Daodaotong', meanwhile, Baidu announced that its navigation app product would be free of charge, At almost the same time, AutoNavi joined this free of charge race.

 

In February 2014, Alibaba decided to spend $1.045 billion to buy the rest 72% of AutoNavi, after it spent $ 294 million acquiring 28% of AutoNavi in May, 2013. The deal is in process. Date back to August, 2010, Alibaba invested $ 35 million to Emapgo(EMG) to become its biggest shareholder.

 

Tencent bought a navigation and mapping company named 'Linktechnavi' in total 60 million RMB in January, 2014. In May, 2014, Tencent bought 11.28% of Navinfo in total 1.173 billion RMB.

 

Up to now, the five biggest navigation & map providers have all been acquired to the giant three Internet service providers (Exhibit 1).

 

Exhibit 1 The relationship between BAT and the navigation & map companies they bought

Source: Stratgy Analytics AMCS

 

The main reason of the acquisition race between BAT for these navigation & map providers is believed to be the beginning of the Internet content and resource aggregation campaigns within BAT, as each company regards map data as a major entrance to mobile Internet users when they are browsing or searching. There must be several points of interests (POIs) connected to this activity, based on users' purpose, restaurant recommendations, travel resource reservation and several other actions will be easily triggered in this map using process. Also, huge amount of Internet data traffic can be redirected to BAT-linked resource. 

 

It is obvious that the navigation applications are the key to the connected cars. The connected car is a 'where' machine. if there is a travel, most of the time it comes with a navigation request. So it would be a good deal to extend BAT's business into OEM and aftermarket aspect in this way. 

 

Other tangible steps that proves BAT's interests in telematics aspect (although aftermarket till now): Baidu cooperated with Tima Networks to release the aftermarket product for standalone in-vehicle navigation devices in Beijing Auto Show in April, 2014. Tencent  established a research lab focusing on telematics products in October, 2013 and just released its aftermarket OBD solutions in GMIC in May, 2014.

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