On 22 September 2017, Sydney Airport became the first organisation to introduce indoor Baidu Maps outside of greater China. Up until now, the app has been dedicated to providing navigation at shopping centres and other public venues within China.
The airport currently serves 15 destinations in China, which provides the highest volume of foreign inbound passengers.
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“China is Australia’s fastest-growing and highest-spending international visitor market,” says Minister for Trade, Tourism and Investment Steven Ciobo. “More than 1 million Chinese tourists visited Australia in 2015-16 (up 22.3% from the previous year), and spent almost $9 billion during their stay.”
Baidu’s strategy for indoor location services
Eighteen-year-old Baidu is China’s largest information provider and is one-third of the acronym BAT, which is used to describe the three Chinese companies leading the tech industry: Baidu, Alibaba and Tencent. However, Baidu’s previous focus on desktops, while mobile applications like Tencent’s WeChat took off, made its growth comparatively sluggish.
In a bid to stay in the race, Baidu has been putting resources into mobile development as well as simultaneously attempting to lead the global stage for artificial intelligence, which put the company back on track with increasing revenue throughout 2017.
Following a $10m Series A investment in IndoorAtlas and an agreement for exclusive rights to the technology in 2015, Baidu Maps started to roll out indoor location services.
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By GlobalDataIndoor Baidu Maps features at Sydney Airport
Now with more than 500 million users, indoor Baidu Maps at Sydney Airport will feature gates and check-in counters, amenities and retail outlets. Functionality includes 3D views, zoom functions and search facilities.
While the initial indoor Baidu Maps project at Sydney Airport took three months to complete, the airport is working with Baidu to implement other features in the future, such as indoor blue-dot wayfinding, which will include augmented reality wayfinding.
“Ease of navigation is key to a positive customer experience and it’s something that Sydney Airport is continually focused on improving, both through traditional signage and the innovative use of technology,” explains Stuart Rattray, general manager technology at Sydney Airport.
“Baidu is already used by hundreds of millions of people in China, which means our passengers are already very familiar with the platform. Our use of Baidu forms part of our China-ready strategy and demonstrates our commitment to delivering a targeted service offering for our Chinese passengers.”
Rattray says the airport’s open data strategy – part of a drive to ensure customers have access the information they need through the channel they choose – means customers don’t have to be limited to channels they are uncomfortable or unfamiliar with.
“We’re always working to find new ways to reach them through the platforms they are already using,” adds Rattray.
Comfortable consumers increase revenue streams
James Hebbert, managing director of UK-based Hylink Digital Solutions – the world’s leading Chinese digital marketing agency whose shareholders include Baidu and Tencent – explains that familiarity is important for engaging customers with a service.
Yet Chinese consumers are far more likely to try out a new app than Western consumers, says Hebbert, who lived and worked in China for five years before heading up Hylink in London, which is why many Chinese already use Google Maps. According to the China Outbound Tourism Research Institute, Baidu Maps is only used by 25% of Chinese tourists when overseas.
“If you look at their habits, the Chinese are very high mobile usage consumers, they are very tech savvy and they do a lot of research up front for travelling, the best deals, far more than we do in the West,” he says. “Chinese travelling abroad are still quite reliant on it [Google Maps] as they know it’s a Western map device, but Baidu is coming up on form and Sydney Airport will be a good case study for it.”
Rattray confirms that users of Baidu Maps at Sydney Airport also have the “ability to provide feedback to retailers”. As well as improving the passenger experience, the app should also boost the airport’s revenue stream.
Hebbert adds that digital marketing opportunities are abundant once the user engages with Baidu Maps. “It’s one of the attractions of using the platform,” he says.
“Maybe you’ve just arrived at Sydney Airport, you open Baidu Maps and you’ve just walked past Zara,” he says. “We know you’re a lady between 20 and 25, and that you like fashion, so we can catch you with a coupon, such as a 10% discount. It’s an effective way of pushing messages as well as receiving.”
He adds: “It’s useful for the consumers to help them navigate, but from a commercial point of view there will be more opportunity to have people spend more time at the airport. If it is a more comfortable environment, they have more purchasing power.”
China’s mobile payment market 50 times bigger than US
With China leading the world for mobile payments, investing in Chinese tech to harness Chinese engagement is a savvy move.
The Financial Times reported (based on Forrester Research data) that Chinese mobile payments hit $5.5tn in 2016, which is 50 times the size of the US’s $112bn market. Alipay, a PayPal-like service launched by Alibaba in 2004, has 54% of market share, the article reports, while Tencent’s TenPay has 37%. Apple Pay, from US tech giant Apple, didn’t even make the top ten.
Hebbert explains that there are several reasons for these trends. Firstly, the Chinese are far more open minded to try new things, whereas Westerners are more conservative. Secondly, the Chinese market is a huge market in which to be a success, compared with Europe where there are so many different countries, cultures and languages that it is hard to scale up quickly. Finally, the state-owned enterprises in China are quite sluggish, so entrepreneurs use a ‘super app’ like WeChat to push the envelope in innovation.
Global expansion of Baidu Maps
According to Here, which has partnered with Baidu to supply maps for its desktop and mobile map services outside China, the company is rolling out its mapping service in more than 150 countries worldwide, across Asia, Europe, Africa, North America, South America and Oceania. The first company to offer location-based services abroad, Baidu Maps continues to push its product outside of China and hopes that by 2020 as many as 50% of Baidu Maps users will be located outside of China.
With 135 million outbound journeys being made by Chinese tourists in 2016, who spent more than $292bn while travelling, and the projected value of the Chinese travel market valued at $732bn by 2020, Baidu’s successful deployment at Sydney Airport will likely be followed by many different organisations following suit.
“One of our clients here is the British Museum, and we help them target inbound Chinese tourists when they’re in the UK,” says Hebbert. “Any wayfinding facility is always a benefit meaning people are more likely to enjoy the experience and spend more time there. Large retail spaces, supermarkets, museums, art galleries, anywhere of cultural importance to attract Chinese tourists has potential.”
