Alibaba’s bid to acquire the outstanding shares of AutoNavi is one of the smartest moves to date in the competitive Chinese e-commerce market.
AutoNavi holds one of the few government issued licenses for mapping streets and addresses in China. This data is valuable for everything from delivery routing logistics to Identity verification to payment management. Alibaba’s CFO has stated, “Recent competition from large well-capitalized Chinese Internet companies has made the online-mapping market increasingly challenging.”
While this move is seen as bulwarking the defense against other Chinese companies, this is clearly a move that would impact competition with Amazon, eBay and other international e-commerce vendors seeking to further their access to the Chinese consumer markets.
Location-based services are a key and fundamental component of long-term success in international growth markets. As witnessed by the investments by other players such as Ozon and Rakuten, investment in delivery infrastructure is a key component to e-commerce growth strategies.
How the SMB e-commerce players address this shifting landscape and gain the same competitive access to this information in the high growth markets is a question that has yet to be fully answered. The one definitive statement that can be made is if this question isn’t answered, smaller players will be shut out of those markets or be forced to service them through the larger platforms with whom they currently compete against.