hinese Internet giant Tencent, the maker of WeChat, has pinned down a strategic investment with indoor mapping startup sensewhere. The total amount of the deal was undisclosed, but the companies said that Tencent now has a license to use sensewhere’s indoor positioning software in Tencent Maps. Sensewhere will also be Tencent’s preferred vendor for location-based advertising services in China.
Tencent Maps is available not only for official accounts in WeChat, China’s largest messaging service, but also for other sites and apps through APIs and SDKs. All three of China’s biggest Internet companies—Tencent, Alibaba, and Baidu—own or hold stakes in competing mapping products and are busy integrating additional services into them.
For example, AutoNavi, which Alibaba owns a majority of, added online-to-offline features to its map app that helps users find nearby taxis and restaurants. Baidu Maps, meanwhile, shows group-buying deals from Nuomi, one of Baidu’s investments.
Sensewhere’s technology provides location information in areas where there is little access to satellite GPS data. Instead, it relies on signals like Wi-Fi or Bluetooth. The company said Tencent’s investment will allow it to quickly scale up the development of its indoor location database because it plans to integrate its software with all major apps made by Tencent and its affiliates.
Indoor mapping is another online-to-offline play (O2O), which is important for both Chinese Internet firms and traditional retail companies. For Internet services, O2O represents a chance to grab users in brick-and-mortar stores and venues, where they still spend most of their money despite the rapid growth of e-commerce in China.
For offline retailers, O2O helps them attract new business while at the same time collecting valuable data about consumer behavior. (For example, Target’s in-store navigation appcollects anonymized data about how long customers stay in stores and what aisles they browse).
For Tencent, investing in indoor mapping represents a way to find new online advertising opportunities. Revenue from its online ads was a high point in Tencent’s otherwise lackluster second-quarter earnings report.
In a statement, Julian Ma, the corporate vice president of Tencent’s mobile Internet group, said “We believe that a superior, universal indoor positioning technology will deeply influence how people interact with each other, and significantly change how companies communicate with consumers and conduct commerce indoors across online and offline platforms. Sensewhere’s unique, highly scalable approach will greatly enhance Tencent Map’s indoor positioning capabilities and enable our users to navigate indoors in a much more accurate and convenient manner.”