Free WiFi:IT Giants’ New Marketing Tool

After taking smartphones， tab- lets， TVs and TV boxes， the Internet giants are now centering around the WiFi.

Xiaomi， a smartphone manufac- turer in China， and Meituan.com， a group-purchasing website， took the lead in this contending. They were followed by Alipay， the largest third-payment tool in China. On May 20， Alipay announced the finalization of a strategic agreement with Wittown， a commercial WiFi solution supplier in China. Together they will provide the WiFi products and services for offline merchants. Analysts say that the core of this is to contend for the offline access to the data and to establish another foothold for its O2O strategies.

Coincidentally， Tecent， another Internet giant in China， was reported to have to plan to bring out its own free WiFi sharing platform.

It is widely held that it is a good method to expand the O2O field through free WiFi-based ads push and getting clients for the offline business， even though it still needs time to have a full understanding of this WiFi-driven business pattern.

O2O for offline business

After the battle of taxi-calling apps fell into silence， Alipay sees the free WiFi as its next sally point for its offline business.

According to the data from Chinas Ministry of Industry and Information Technology， there are about 580 million smartphones being used in China. A smartphone holder averagely spends 46% of his time of using the smart- phone surfing the Internet with WiFi. The commercial WiFi is becoming a great contributor of data volume of the mobile Internet.

Lai Jie， CEO of Wittown， said that 69% of the smartphone-based data volume came from WiFi and the proportion was going to be increased to 80% three years later. In addition， 80% of the offline payment will be made through mobile terminals in the next five years.

Apart from being less costly and more convenient， the commercial WiFi is also able to provide the accurate analysis of customer behavior with the development of location services.

Xiong Yibin， general manager of Alipays WiFi project， said that consumers who had installed Alipay Wallet in their smartphones can automatically receive a push message when they enter a place with Alipays free WiFi connection. If the consumer clicks this message， they can get free connection to the Internet. Take a hotpot brand for example： it has 91 restaurants， each of which can receive around 1600 customers on a daily basis. Assuming 30% of these customers get connected to the WiFi and a customer can get to the restaurant three times a year， this free platform will bring 5.31 million loyal fans to this hotpot brand. Meanwhile， Alipay will share a large part of data with the offline business.endprint

Huang Yuan， a long-term watcher of the O2O business， said that Alipay did this to take more accesses to the mobile Internet. It is not a matter of important for this access to match its services or not.

Meituan.com started to spread free WiFi connection in some cafes， restaurants and cinemas from the end of last year. It also launched the iOS app Meituan WiFi. It seems that this grouppurchasing website is earlier than Alipay in the actions.

Previously， Alibaba， the parent company of Alipay， invested in Meituan. com， but the two companies had no cooperation. As Xiong Yibing said， Alipays free WiFi is promoted to businessmen through two ways： the direct transfer to these having cooperated with Alipay， and the sites under the coverage of Wittowns network.

In addition， Wanda Group， one of the largest property developers in China， is also actively promoting the WiFI connection in the commercial projects in developed. Nowadays， the free WiFi connection is available in Wanda Squares of many cities， which is considered an important step for Wanda Group to match into the O2O world.

In Huang Yuanpus opinion， the offline market is less concentrated than the online market. Therefore， it is hard to see one or two companies taking dominance of the entire market. “The offline business is scattered， unlike the online websites， which can attract more users with a bigger size. In spite of this， the data and extended service provided by Internet companies can still improve the appeals of offline business.”

The Allocation of Capital

Apart from the abovementioned projects， Gaopeng.com， a website founded by Tecent and Groupon， shifted its focus to the O2O business from this April by applying the free WiFi router to its offline business sites. Users can use the WiFi through their WeChat accounts after finding the WiFi hotspot. They no longer need the traditional password and account name.

Even though Tecent remains silent about this， it is widely believed that Tecent is using WeChat， a strong tool for mobile communication， to take an important position in its O2O business.

The similar WiFi routers or other devices are also among the products of Baidu， Xiaomi and other Internet giants. All of a sudden， this sector， which used to be unpopular， is in such a rage that many investors spare no money in this.

At the end of last year， Xiaomi was reported to have invested in Wiwide， which is a company founded in 2007 and providing the service of installing and maintaining the WiFi devices for cafes， western restaurants and airports.endprint

It earns money from the ads which are automatically shown on users mobile terminals when they get connected to WiFi with Wiwide devices.

In addition， the WiFi Spirit， an app supporting the network sharing， received the investment of US$12 million from several venture investors in March， two years after its initiation.

Si Xinyin， the co-founder of WiFi Spirit， said that 60% of its users are students， who are not able to afford the costly Internet access in the school. Therefore， sharing is their type and WiFi Spirit can easily satisfy their demand.

Like most of the WiFi connection suppliers， the ads are still the only sources for WiFi Spirit. Right now WiFi Spirit is far from earning profits. Si Xinyin admitted that it was still too early to think of earning profits from free WiFi connection. “In my opinion， no companies are thinking of earning money when they initiatively got into this field. They will not do this in a short while. Our current goal is to expand the database of users as quickly as possible.”

He also believes that the smart routers and other WiFi-related hardware industries will meet a period of integration， but the application world is going to be more open. “The wide use of WiFi will bring about a market worth multi-billion yuan. It will open the door of mobile Internet to numerous new users. It will also serve as a platform for the smart communication. Such a grand platform needs to be tended carefully. Any simple and unplanned pattern will be eliminated.”

In the Stage of Exploration

The active involvement of Internet giants into the free WiFi could easily remind people of the furious battle of taxi-calling apps at the beginning of this year. In that battle， the Internet giants， represented by Tecent and Alibaba， threw tons of money into taxi-calling apps， supporting their expansion with the bonus offered to drivers and passengers.

However， in the WiFi connection， things are more complicated than the taxi-calling since there are a lot of types of businesses ivolved.

Seaspider， a company similar to Wittown， focuses on the services for banks business halls and Internet cafes. It is also contacting Alipay， hoping to join the latters rank of free WiFi service suppliers.

Huang Yuanpu said that Alipay was a bit late in this field. “It cannot be the sole ruler in this field. Neither can the other companies. All we can do is find more partners in this scattered field.”

Most of the businessmen still waver in accepting the free WiFi connections in their business sites or not. A director of a large chain catering brand said that the free WiFi might not bring customers to their restaurants. “Many users have the need for WiFi after coming to our restaurants. They do not come here for WiFi. Therefore， how to bring customers is still a problem for us.”

In addition， most of the service suppliers are charging these business sites for the WiFi devices and services. They， especially the Internet giants， are expected to provide free services or even bonuses just as what they did in the taxi-calling apps.

Xiong Yibing held the belief that this pattern is good for the business sits as they can provide the accurate delivery through big data analysis. It could also export the credit fundraising system， assisting businessmen in solving their problems of fundraising.endprint