Tencent has a Plan for the Internet of Cars with the Newly Acquired Stake in NavInfo

Tencent has a Plan for the Internet of Cars with the Newly Acquired Stake in NavInfo

by Tracey Xiang – May 23, 2014

State-owned China Survey has been authorized to sell 11.8% stake in mapping company NavInfo to Tencent for RMB1.173 billion ($189). Now Tencent is the second largest shareholder in the company.

Mark Ren, COO of Tencent, said at the press conferenceyesterday that the Chinese social giant will explore opportunities in the Internet of cars with NavInfo after the deal.

NavInfo will focus on map services pre-installed in cars while Tencent will work on software for car drivers to adopt, the two companies said.

Tencent and NavInfo will develop an open platform together for third parties. Tencent has developed an maps API for developers to build features on WeChat, the dominating mobile messaging app in China.

NavInfo claims it’s the largest maps provider in China and has 60% the market of pre-installed in-car mapping services. The clients of NavInfo include global car manufacturers including BMW, Volkswagen, General Motors, TOYOTA and Mercedes-Benz.

Previously Tencent Maps bought digital map data from AutoNavi, a competitor to NavInfo and who has been fully acquired by Alibaba. It’s not surprising Tencent suspended cooperation with AutoNavi and made investment in its competitor, for the Chinese online social company and Alibaba, known as an e-commerce company, now are in direct competitions in a lot of mobile sectors, such as m-commerce, gaming and mobile maps/navigation and online-to-offline service.

Alibaba and Tencent now both have free mobile maps and navigation apps. But a fiercer competition is expected to take place in online-to-offline business they both are working on, which needs location-based services supported by map data, locating capability and so on.

Both NavInfo and AutoNavi started with paid services for businesses and consumers; for instance, selling map data to car makers or navigation software to car drivers. After Internet companies entered into the mapping sector, especially after they launched quality navigation apps for free, they saw big decline in their businesses and revenues.

AutoNavi shifted focus to consumer-facing services earlier than NavInfo. AutoNavi announced to stop charging navigation products in August last year, later on the same day with Baidu who developed a similar app and decided to offer it for free. NavInfo finally decided to tap into consumer-facing sector last year.

A late version of its maps app, Amap, added a feature for sending messages from smart devices to car. Other than that I didn’t hear much about AutoNavi’s move on in-car connectivity. Since AutoNavi now is an Alibaba company, it’s understandable if AutoNavi would be focused onbuilding a Taobao-like marketplace for physical stores as its management said in early 2013.


About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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