Text: Hong Kong Stock Research Society
Learning from history, we can often see the wisdom of the ancients and the progress of the times from today's events. As the writer Heng Kuan once said in the late Western Han Dynasty, "those who know change with the times, and those who know make things as they go."
The source of the picture comes from AutoNavi official
Recently, AutoNavi has shown such wisdom. When the online car-hailing market was saturated, AutoNavi reviewed the situation and announced the resumption of the ride-hailing business, which was launched on a large scale across the country, covering a total of 65 cities in the Pearl River Delta, the Yangtze River Delta and Wuhan City, Hubei Province, completing another important layout in the field of travel services.
Restart the hitchhiker, and the "cake" of the incremental market should not be missed
In retrospect, at the end of 2017, AutoNavi's online car-hailing prototype was officially formed, which is different from Didi, and AutoNavi, which entered the online car-hailing market later, found another way and adopted an aggregation model. Subsequently, in 2018, due to Didi's hitchhiking turmoil, AutoNavi briefly launched the hitchhiking business and then took it off the shelves.
Recently, T3 entered the hitchhiking market, and AutoNavi also restarted the hitchhiking business. A large part of the reason behind this is due to the saturation of the ride-hailing market and the potential and advantages of the ride-hailing market itself.
In June this year, Dida Travel successfully landed on the Hong Kong Stock Exchange and became the "first share of shared travel in China". Judging from the prospectus, from 2021 to 2023, the adjusted net profit of Tick Travel will be 238 million yuan, 84.71 million yuan, and 226 million yuan respectively; In the first half of 2024, Dida Chuxing's adjusted net profit reached 130 million yuan, a year-on-year increase of 51.3%.
In the same period, the shared travel platform for the IPO in Hong Kong, Tianyancha shows that Cao Cao Travel will lose 1.92 billion yuan in 2023, and Ruqi Travel will lose 690 million yuan. In contrast, in the generally loss-making shared travel industry, Tick Travel is one of the few companies that has achieved profitability.
It is worth noting that the proportion of Dida Travel's ride-hailing business has increased from 66% in 2018 to 95% in 2023, which is a pivotal position.
Image source from pixabay
In addition, hitchhiking is a light model, and the platform does not need to create its own fleet or bear the operating expenses of the rental fleet.
Moreover, in the current four-wheeler mobility market, hitchhiking only accounts for 1% of the market. By 2025, the size of China's ride-sharing market will reach 113.9 billion yuan, with a compound annual growth rate of 41.8%.
In terms of total transaction value, the total potential market size of ride-hailing is expected to reach 522.9 billion yuan in 2025. The ride-hailing market is expected to be the fastest-growing segment in the future. It can be seen that with the change of consumption habits, the use scenarios of ride-hailing will be more in line with the needs of users, and the online ride-hailing market will turn into a stock red sea market, and the ride-hailing market will turn into an incremental market.
Not only that, in the first half of this year, the online car-hailing market has approached the red line of saturation. Jingdezhen, Suzhou, Chongqing, Putian and other places have issued saturation warnings due to overcapacity, and publicly reminded caution to enter the online car-hailing industry.
In the past, AutoNavi also focused on online car-hailing, just like Cao Cao and Ruqi Travel. Now joining Hitch is to seek ways to break the saturation of the online car-hailing market, and at the same time, it is also to make up for the shortcomings and tilt towards market demand.
The commercialization problem is ahead, and AutoNavi's "ambition" does not stop there
Joining the hitchhiking business, in addition to making up for shortcomings, leaning towards user needs, and seizing the increment of the hitchhiking market, AutoNavi also has the intention of trying to solve the commercialization problem.
From the perspective of Internet genes, AutoNavi Map has ranked among the top 5 of China's Internet monthly active products. QuestMobile statistics show that AutoNavi's monthly active users and daily active users have stabilized to exceed 100 million, but in terms of earning power, AutoNavi has a big gap with the other four in the top 5.
Compared with Google Maps, the leader of the global map navigation platform, although it has more than 1 billion monthly active users and has achieved the absolute first place in the vertical field, its total revenue is not as amazing as imagined, with its largest source of revenue advertising revenue as an example, compared with the advertising revenue of the parent company Google, accounting for only about 5%, the gap is obvious.
It can be seen that the difficulty of making money cannot be simply attributed to AutoNavi itself, which is the same dilemma that is common in map navigation software. And the reason behind this is simple.
Because the initial positioning of the navigation map is a tool-based product, in the face of clear travel navigation needs, the map is a rigid product, but once the information is obtained and the destination is reached, users often exit the application. This kind of "use and go" user behavior characteristics are destined to make it difficult for the map navigation platform to build an on-site ecology with both monthly activity, daily activity and duration of users.
However, the premise of monetization of most Internet products is that users stay in the product and interact with it as often and for as long as possible, and then realize the "monetization" of users through advertising, e-commerce, etc.
In this way, the only direction to extend from tool-based products is to open up the whole chain of navigation, aggregation of online car-hailing and in-store business, and the final landing point is local life. In the past few years, AutoNavi has indeed been reinventing itself step by step, gradually transforming from a map software to a "super app" that gathers travel, ticketing, social networking and local life.
Therefore, joining Hitch at this time is undoubtedly taking into account the development dilemma of online car-hailing, and turning to Hitch to undertake or share the "functions" that originally belonged to online car-hailing and taxis, connecting these two links from navigation to stores, so as to open up local life services.
Moreover, as an aggregation platform, AutoNavi naturally has a high degree of inclusiveness, which can be compatible with models of major platforms without violating the rules, improving the order acceptance rate and providing users with greater choice.
The convenience is comparable to that of online car-hailing, but through reasonable route planning, hitchhiking can transport multiple passengers in a single trip, which can alleviate the problem of tight road traffic capacity to a certain extent, and at the same time provide more efficient transportation services, which can be described as "killing multiple birds with one stone".
Here, AutoNavi's idea is to meet the needs of users through multiple dimensions and strengthen the frequency of interaction between products and users, so as to achieve "monetization".
In terms of freight rates, AutoNavi Hitch also shows a higher cost performance. According to user feedback, the price of AutoNavi Hitchhiker's exclusive orders is roughly maintained at about 1 yuan per kilometer, while the shared orders are more economical, with an average of only 0.7 to 0.8 yuan per kilometer.
After combining multiple factors such as efficiency, cost performance, and convenience, AutoNavi Map has indeed shown a stronger appeal. From a single navigation tool to a life service platform, the perfection of the whole chain will be directly linked to the progress of AutoNavi to solve the commercialization problem.
Robotaxi - the "robbery" that the aggregation platform can't avoid, starting from the data to break through
In the past few years, AutoNavi's transformation in commercialization has always revolved around one direction and two routes. The general direction is local life, and one of the two routes is to benchmark Meituan's in-store business, and the other is to catch up with Didi's aggregate ride-hailing business.
Meituan and Dianping's local life business, especially the in-store business, has always been built around "content", playing the role of providing user search, drainage, and evaluation system construction for catering, ticketing, travel, and other businesses.
As an aggregation platform, AutoNavi has recently added a new "four-wheel direct delivery" service model, once again aggregating a number of mainstream distribution platforms, based on the automobile transportation capacity of AutoNavi's taxi cooperation online car-hailing platform, to provide users with differentiated instant delivery services, trying to work speed, differentiation and cost performance.
Image source from pixabay
However, whether it is around content, or focusing on differentiation and cost-effectiveness, the local life service platform will usher in a common enemy - Robotaxi. This stems from changes in travel patterns, especially aggregating ride-hailing platforms, which will be the first to be impacted.
The reason is the cost. Under normal circumstances, when the travel distance of online car-hailing reaches 10 kilometers, the price is expected to be about 20 yuan, while the cost of the radish run is only a quarter, and the cost advantage is very obvious.
Moreover, it is foreseeable that after the popularity of Robotaxi, low prices will become mainstream again in the shared travel market. In the face of this gap and trend, AutoNavi re-launched the ride, with the price advantage may be able to resist for a period of time, so that it will not quickly lose the market, but in the long run, it is optimistic.
Entering the Robotaxi market, autonomous driving companies and car manufacturers have a first-mover advantage, because they have core cost advantages and mature manufacturing technology, while AutoNavi cannot easily enter the game, and the situation will be very passive.
However, if the driving data and user data are taken into account, based on the characteristics of the aggregation platform, superimposed on hundreds of millions of monthly active users, and a wealth of optional models, the driving data that the platform can create will be very considerable.
With data in hand, when Robotaxi comes suddenly, AutoNavi will not be too passive, and can still form an effective bundle to "contribute to its own commercial monetization". Because the advancement and iteration of autonomous driving is inseparable from the feeding and training of real-world driving data.
It is also a shared travel platform, AutoNavi takes the same road as Google Maps, and the "terminal" is a local life service. Moreover, from the perspective of core business, Meituan's focus is on the food delivery business, and AutoNavi is aggregating taxis. Therefore, whether it is dealing with the impact of Robotaxi or taking root in local life, the taxi business is the top priority of AutoNavi.
In the end, in the face of the brutal market, how to maximize the value of the platform and realize the transformation from aggregation "tools" to aggregation "services" is AutoNavi's long-term proposition.