Free Wi-Fi is new battleground for China’s internet giants

June 16, 2014 Leave a comment

Free Wi-Fi is new battleground for China’s internet giants

Staff Reporter

2014-06-11

Free Wi-Fi service is expected to become the next battleground for China’s internet giants, who are trying to tap into the online-to-offline (O2O) market, the Shanghai-based National Business Daily reports.

Alipay, the third-party payment service operated by Chinese e-commerce giant Alibaba, recently announced a partnership with Wi-Fi service provider WiTown, under which the two companies will help vendors establish Wi-Fi services at their stores. The Wi-Fi will be offered to customers free of charge.

The announcement made on May 20 is seen as another of Alipay’s efforts to expand, following the recent foray into the taxi hailing app market.

WiTown CEO Lai Jie told the paper that he expected 80% of online traffic to go through Wi-Fi in three years, while 60% of the payments made in the real world would be handled through mobile services. The development of location-based services will also allow Wi-Fi service providers to offer more customer data with better precision, Lai added.

Meanwhile, Alipay’s free Wi-Fi project manager Xiong Yibin explained how the two companies’ services would work, saying that once a user of the Alipay app entered the area where a free Wi-Fi was available, a notification would be sent about the free service, with a link to launch. Alipay will offer user data it collects through the free Wi-Fi service to vendors that opted for the Wi-Fi solution provided by Alipay and WiTown, he added.

O2O market observer Huang Yuanpu stated that Alipay’s move is aimed at becoming a portal for mobile users, and whether the service can turn into a revenue source is not important.

Daily deal site Meituan has already launched its free Wi-Fi service at several shops late last year, while the Tencent-backed Groupon China unit reportedly advertised similar Wi-Fi deals to vendors in April.

Apart from internet companies, venture capital funds have also shown an interest in the area, the paper said, noting handset maker Xiaomi’s investment in WiWide last year and the successful fund raising for Nanjing TX Network Technology, which has developed a wireless internet connection sharing software called Wi-FiGX.

Huang said that it was late for Alipay to move into this area, since it was unlikely that a dominant player would emerge from the fragmented market.

Concerns about online security surrounding the use of free Wi-Fi in public places may also affect the willingness of internet giants to invest in the area, the paper said.

 

Filed under Macro Trends, TMT Trends

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