Telematics Japan 2014: Telematics in China and Thailand

IT Big Three leading Chinese market; glimpse of telematics in Thailand

2014/11/07

Summary

 Telematics Japan 2014, Japan's largest forum dedicated to the future of automobility, was held on October 15 and 16 at Hilton Tokyo. This report summarizes lectures on recent progress of telematics markets in China and Thailand, with a special focus on the type of contents that are sought by end users.

China: New era led by IT Big Three
 Mapping service providers (NavInfo, AutoNavi, etc.) used to lead the telematics market in China. The market saw drastic changes in 2013, such as the rapid market penetration of smartphones and the charge-free mapping applications. Another major change was the acquisition of and investment in mapping service providers by the IT Big Three (Baidu, Alibaba, Tencent) collectively referred to as BAT. The telematics market in China is bound to be led by BAT.

Thailand: Traffic information service based on GPS data from taxis
 In 2012, Toyota Tsusho Electronics (Thailand) started a traffic information service called "TSQUARE Traffic" in Bangkok. The company installed GPS devices in some 9,000 taxis in Bangkok to cover lack of accurate information provided by government authorities on road congestions. The positional information of the devices is collected and analyzed every several seconds. With this system, the company can provide information on traffic jam for its service users. The same service will be introduced in Indonesia in 2015.

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Mergers, Acquisitions and evolving Chinese telematics market

Presenter: Keisuke Tajima  Senior Supervisor, Telematics Department, Car Electronics Business Planning Division, Pioneer Corporation

Agenda

Mapping service providers used to lead the telematics market in China. However, the emergence of BAT seems to be a turning point as they are changing the players altogether. This is expected to lead to a structural change in the ecosystem (earnings structure).
How will the emergence of the IT Big Three, Baidu, Alibaba and Tencent, affect delivery management, emergency rescue and other telematics-based O2O (Online to Offline: See Note) services?
How will the acquisition of and capital investment in mapping service providers affect the telematics ecosystem in China?

(Note) A generic term for a style of service bridging online service to offline stores with sales staff.

 

Telematics service development in China

Dawn of telematics in China (2002) In 2002, electronic mapping service was introduced by NavInfo in China for car navigation systems. Similar service was started later by AutoNavi. The two companies hold 90% share in the mapping service market of standard-equipment car navigation systems in China as of January 2014. The mobile mapping service and navigation system market is represented by AutoNavi (27.7%), Baidu (23.3%) and Google (15.9%) as of the first quarter of 2014.
The key criteria in selecting partner mapping companies was the national license for creating maps, their corporate quality, continuity of their business and the policy regarding map maintenance.
Today, 12 mapping companies are licensed to create maps.
Rapid growth of mapping apps and start of charge-free services January 2013: The number of AutoNavi users topped 100 million. NavInfo was suffering in 2012 from the sluggish business of its chief customers, Nokia and Japanese automakers.
August 2013: Baidu and AutoNavi introduced charge-free services urged by the rapid growth of smartphones in China. Approximately 31 million smartphones were sold in the first quarter of 2012, which accounted for nearly 50% of the cellular phone market. The number rose to 100 million in the first quarter of 2014, which accounted for over 90% of the market.

 

The era of the IT Big Three: Baidu, Alibaba, Tencent

Acquisition of electronic mapping companies by BAT * Baidu: Acquired 100% ownership of RITU.
* Alibaba: Acquired 100% ownership of AutoNavi in February 2014.
* Tencent: Purchased 11.28% stakes in NavInfo in May 2014 to become the second largest shareholder.
IT Big Three era

Scope of services provided by BAT

 BAT provide mapping service, social network service and search engine function (charge-free). From these services, the users are directed to BAT's respective online stores where they will be charged for services and buying commodities.

(Note) The search engine giant, Google, is striving to enter telematics markets in different countries starting with mapping services, but pulled out of China in 2010.

 

Baidu Alibaba Tencent
Online

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Offline
Directing users to own websites Map
SNS
Search
Conversion Group buying
Electronic commerce
Taxi dispatching
Lifestyle information
Travel
Payment Payment system
Offline resources such as actual stores Own stores, etc.
Affiliates
Derivative stores and services
Feedback Sharing customer reviews

Source: Created by MarkLines based on Pioneer presentation material

Baidu's approach to telematics

Baidu will provide its platform and technology for hardware makers under the "Baidu Inside" initiative (announced in 2014). Baidu will offer makers access to its technologies in cloud storage, voice recognition, sales network, data, location, etc. The makers will sell products with the "Baidu Inside" logo. Supporting networking of household appliances is one of the chief aims of the project. Head-up displays for automobiles are among the items that are under consideration by Baidu.
The "Baidu Inside" is an appealing project for hardware makers although they are obliged to carry the "Baidu Inside" logo on their products.

 

Alibaba's approach to telematics

Affiliation with auto industries In February 2014, Alibaba acquired 100% ownership in AutoNavi for USD 1.05 billion.
In July 2014, Alibaba announced strategic partnership with SAIC Motor regarding Internet-enabled cars (smart cars).
Smartphone OS The company developed Aliyun OS based on Google Android open source (see Note).
Future Alibaba may develop on-board OS using Aliyun and enter the telematics market.

(Note) In 2012, Google requested Acer, a Taiwan-based vendor, to stop selling its smartphone that ran on Aliyun OS, saying that it was actually a non-compatible version of Android although it used an outcome of the Android project.

 

Tencent's Lubao Box

Lubao Box: When connected to an on-board diagnostic port (OBD-II connector), the gadget connects to a smartphone via Bluetooth and sends diagnostic data to the user. It was announced in May and released for sale in October 2014. The Lubao Box had 420,000 pre-release orders in September.
Using a special application, the user can diagnose the car and check the fuel level in the tank, the amount of accelerator pedal stroke, etc. The driving score may be shared with others via Tencent's SNS. The app can also be used to call for an emergency rescue. Tencent uses the driver's information and provides road conditions to users in 21 cities across China.
The company is partnered with taxi operators, insurance companies and road service providers.

 

 



Case study from Thailand: Combat Traffic Congestion with High Quality Traffic Information Services

Presenter: Itti Rittaporn, General Manager, Toyota Tsusho Electronics Corporation

TSQUARE Traffic:Traffic information service based on GPS data from taxis in Bangkok

TSQUARE Traffic Traffic congestion is a serious problem in large cities in Asia. Governments often do not have necessary infrastructure for gathering accurate traffic information. Then, it is left to private companies to decide how to collect such information.
In 2011, Toyota Tsusho Electronics Thailand (TTET) took up the challenge. In 2012, TTET began delivering traffic information to smartphone users. In 2013, the company began delivering traffic information on VICS/RTIC formats that are standard on on-board devices in Japan and China.
TSQUARE Traffic information system Road congestion information
TSQUARE Traffic information system based on GPS on taxis Road congestion information over Bangkok metropolitan area

 

Method of gathering traffic flow data Data are collected every 3 or 5 seconds from GPS devices installed in some 9000 taxis in Bangkok metropolitan area. Up to 60 million bits of data are collected daily. GPS devices are also installed in 250 trucks (to be increased to 5000 trucks) to gather data from suburban areas as well. Data are collected and analyzed by the server and the traffic jam information is delivered via the Internet and FM to on-board navigation systems and smartphones for consumers.
Information is collected from major roads in Bangkok to maintain 70% accuracy. Only 40 to 50% accuracy is available on similar charge-free services delivered by other providers using traffic information supplied by the government. (Some of the TTET services are provided free of charge.)
Flood information The system uses flood information supplied by a government institution to warn the users about submerged roads as well.
Future Zenith satellites will be used to get more accurate location data and warn the drivers of congestions by lane. Demonstration tests are scheduled in the near future.
TSQUARE Traffic will be introduced in Indonesia in 2015. The company hopes to introduce the system in Malaysia, the Philippines and other parts of Southeast Asia.
Provision of flood information
Provision of flood information

 

Seeking partners for collaboration

 TTET is seeking partnership with telematics companies and contents providers by using TSQUARE. TTET is suggesting GPS data and traffic information or analytical results for telematics companies. The company is proposing for companies that provide contents (information about parking lots, restaurants, etc.) to display their information on TSQUARE.

 

Telematics industries Provision of big data Location: Up to 60 million bits of GPS data daily
Travel time: Data based on traffic history over the past 3 years
Big data analytical services 1. Average taxi speed analysis: Congestion indicator, travel time prediction
2. Number of taxi passengers, get-on and get-off places, demand area, demand prediction
3. Taxi speed by street
4. Traffic problem and accident site analysis (by gap analysis from average speed)
5. Traffic volume prediction
Contents providers Analysis of driver's behaviors in the taxi A network with 500 drivers with smartphone connectivity to answer questions such as what they do when in the taxi, which apps they use, and what they wish for when caught in congestions.
Seeking partners for providing various contents (Ex.) Parking information: Information on parking lot availability at 14 parking facilities in Bangkok to be displayed on TSQUARE in collaboration with Nippon Parking Development. The number of parking facilities will be increased to 100 in the near future.
TTET's areas of interest
TTET's areas of interest for business collaboration

 

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