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Alibaba’s AutoNavi: The Threat despite Significant Milestone

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AutoNavi’s milestone

AutoNavi (or Amap), Alibaba’s (BABA) map service, hit a record 100 million daily active users (or DAU) in the week ended October 1. Alibaba acquired AutoNavi in 2014 for $1.5 billion.

Amap transitioned from a vanilla map and navigation service to a vehicle booking platform under the leadership of Alibaba. Its platform includes the following:

  • ride-hailing services Didi, Shenzhou, Shouqi, and Caocao
  • bike rental companies Ofo and Mobike
  • Fliggy, Alibaba’s travel and booking platform

AutoNavi also provides destination content catering to tourists. It’s also the mapping data provider for Apple Maps China. Its other users include Honda and General Motors’ Cadillac.

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Alibaba’s transportation endeavors

Alibaba has launched the City Brain platform to improve the transportation system by infusing its transportation data with cloud computing technologies. The company also started carpooling service in March to improve traffic congestion.

AutoNavi’s DAU is estimated to have surpassed Baidu’s DAU. Baidu (BIDU) owns 80% of China’s search engine market share. It reported 300 million monthly active users (or MAU) but hasn’t provided any data related to them.

Who is the potential threat?

There is, however, intense competition brewing from a new source. Earlier this year, Alphabet (GOOG) denied any plans of reintroducing Google Maps in China. That marks the eighth year that Google Maps has been banned in China. But rumors are that Alphabet is building a customized version of Google Maps and a map application for iPhones in China.

Alphabet’s applications have a selective presence in China. The Google Maps browser is available on desktops and mobile devices, while the Google Maps app is not available in app stores. Alphabet is trying to enter China by forming alliances with Alibaba’s competitors, including JD.com (JD) and Tencent (TCEHY).

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