Sunday, December 29, 2013

How has location-based services evolved into the #dailyhabits of consumers and business models for businesses?

For more than a decade, LBS or location-based services had become gradually ingrained into the daily habits of online mobile Internet consumers, going from the usage in just vehicles of a select number to these days en-masse to the PC Web, Mobile Web and Apps. The growth to mobile for the increasingly on-the-go consumers is undeniably relentless. The opportunities in location-based services are garnering momentum in a number of ways in the markets.

 With the growth and penetration of smart devices globally (especially lower cost smartphones, tablets), not only are LBS apps being constantly developed, piloted and experimented in more and more markets by startups, established Internet brands and companies have also been moving in to invest into LBS companies – for their assets in contextual data (user profile, content browsing, content generation in tips and reviews and transactional behaviour for deals and coupons tagged to location).

 The question that comes "What do users want in a location-based app?" - click on the link and you will find a good Quora discussion with leading bogglers and tech evangelists like Robert Scoble providing his views on this topic.


From my market observations and following discussions in Quora, I believe LBS in the market are being driven by the following drivers:

 (1) Emotional/Informational needs drivers (refer to above diagram; on the left):
  • Gamification, social leaderboards are used to engage consumers (more often than not, peer to peer friendly competition for bragging rights)
  • Time capsule/journal: into your own life/newsfeed on where you have been, passed by/through alone/with friends; time-based contextual/mood based markings aka bread crumbs
  • Bookmarking future intent, to-do list
  • Connecting with people, new friends - explore and find people in vicinity with similar interests, profile
  • Trend setter - leaving tips behind.

 (2) Rational/Gratification targeting drivers (refer to above diagram; on the right):
  • Price comparisons through daily deals, bar-code reading of prices.
  • Get recommendations - see where friends are at; heatmap of where are the hot places to be spotted
  • Hot deals - swarmed based daily deals as a traffic driver are losing their attractiveness for sustainability of businesses; this tactic may change depending on the business maturity (loyalty play?)
  • and Businesses seeking to capitalise on targeting on-the-go consumers (either own customers through loyalty, bought customers through offers, in the longer term, earned customers through WOM and recommendations from business ambassadors)
LBS apps in the market, depending on their focus areas – whether in Location-based SNS, location-based deals to retail or simply a navigational utility, have worked their way into the daily habits of today’s mobile on-the-go consumers, bearing differing levels of frequency and retention in usage.




From these focus areas in daily habits usage, different business models are being experimented by LBS companies largely with businesses (most oft than not, consumers will download and use LBS apps for free). Who are in the LBS business? Google, Yahoo, Microsoft, Apple, Foursquare, Alibaba, SingTel …

Business models follow to provide to the ancillary value for businesses, in the drive to retail O2O (online to offline) business: content (mobile) marketing of new menu items, promotional offers via coupons; loyalty points replacing current physical cards, table reservation, delivery and so on, are being piloted.

 No one model is yet a proven model (none yet in the top rightmost quadrant - refer to the 2X2 matrix) as businesses need to be convinced on the opportunities for them (consumer profile understanding) and the longer term play required for returns to be seen in investing into location-based services like mobile LBS marketing, mobile coupons etc. Yet we do see encouraging signs that businesses are seeing the light and embarking on their journey into mobile apps, digital marketing and initiatives - evident in the growing share on digital advertising over traditional advertising in the US and globally too (in Singapore, 20% of advertising revenues will come from Digital by 2020, up from ~10% in 2011).

 According to Convergence catalyst’s report “Location Based Services: Global Market Overview, Deployment Trends and Potential in Enterprise, Government and Consumer segments”, key use cases for LBS in the different regions globally are as follows:

  • In APAC - restaurant finder, no surprises, given the huge focus on food and restaurant dining in APAC
  • In EU - mapping and navigation
  • In NA - family tracker, mapping and navigation
  • In LA - friend finders
  • In MENA - navigation, safety, emergency and tracking


And so in my analysis on the positioning of LBS players in the Southeast Asia, Singapore markets, I have focused on 3 leading players (the first 2 are in the restaurant finder business):

(1) SingTel's Hungrygowhere (HGW)
(2) Burpple
(3) Yelp

On the Social/Reach vertical axis, we have 2 key players – the established player Yelp and the Singapore startup Burpple, who have positioned their focus on Social, intangible recognition and reaching out to a global audience.

On the Tangible/Richness horizontal axis, we have HGW, a Singapore startup which was acquired by SingTel, has leveraged their wealth of restaurant reviews and connections with Singapore restaurants to build up tangible business revenue streams like ads and table reservation through PC Web and Mobile App channels. 5 years or so in the market,HGW has long-standing brand recognition in the Singapore market as the incumbent for restaurant reviews. HGW has recently also launched in Malaysia on Aug ‘13.

For this analysis, I have left out Global players like Foursquare, Tripadvisor as well as regional players like Openrice, Zomato in this analysis who are also building their business footprint on with social and/or tangible business axes.

Last but not least, there are also niche LBS players in the markets here like Perx, Harpoen, SGMalls, Spawt, SGSportsBar and so on, who are in the emergent and market tapping stage - building product, partnerships and social reach.

The LBS market has been around for more than a decade. And location with LBS remains a consistent theme in startups in the markets here. Earlier in 2013, I had written about how  businesses will start to look and build their loyalty programs around social, mobile and  location. And I am sure that we will start to see more of such LBS offerings taking shape into 2014 and beyond.

Do take a look at the attached slideshare deck "LBS (Location-based Services) Market Landscape | in #dailyhabits | Drive to O2O (Online to Offline)" which I have referred in this post. I look forward to hear from you on your take on the LBS market evolution.


Till the next post,

PS: here is a little background on SK planet where I am currently at.
SK planet, a subsidiary of SK Telecom and part of Korea’s 3rd largest conglomerate, SK Group, has a long-standing experience in the LBS portfolio (amongst its many other product line offerings in digital content and also eCommerce, having explored, tried and tested various LBS app concepts for more than a decade. With T-Map and OKMap, SK planet has maps and content experience in LBS. With NaviCall and Gtrac, SK planet covers the Enterprise business areas in LBS for Taxi call booking and commercial fleet management. With recently with Pickat, SK planet is leveraging its LBS experience and know-how in testing the markets in Korea and Singapore on discovery, social and curation aspects of LBS offerings with consumers and local businesses.



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