An international location-based services industry exhibition in Suzhou, Jiangsu province. By gathering information from mobile terminals, location-based services companies can offer information such as navigation, e-maps and cargo-tracking. Provided to China Daily

As early as November, Kangping, the most northerly county of China's Liaoning province, embraces its first snow of the year. The temperature drops below zero degrees Celsius and may even fall to minus 30 later.

Under the grey sky, bundles of cornstalk lie on the rich black soil. Icy winds, mixed with smoke from firewood, blow into people's nostrils and make them sneeze.

Winter had once been the most troublesome season for Huang Yanqiu, headmaster of Kangping's nine-year compulsory education school. When the weather becomes colder, more students tend to take privately owned school buses.

Craving more profit, school bus drivers used to play a cat-and-mouse game with local student safety supervisors. They secretly overloaded the buses, drove at excessive speeds and avoided regular vehicle condition checks.

In order to protect students from accidents, Huang and other teachers escorted children to buses and tried to make sure everything was ok.

"Things have now changed," Huang said, slowly sipping a cup of tea. The clock hands pointed to 3 pm, when students start to leave school for home. "All school buses in Kangping have been installed with an electronic system that helps us check buses at anytime, anywhere," Huang said.

It is a global positioning system that stores detailed information such as vehicle type, color and the driver's name of every school bus. It is connected to a surveillance center and transmits real-time bus locations to the center.

China Mobile Ltd, the world's biggest telecom operator by subscriber numbers, provided the service to Kangping county. The company has developed into a leading location-based services provider in China. It had a customer base of more than 40 million by 2011.

The Kangping case is one of many location-based services in China. By gathering information from mobile terminals, location-based services companies can offer information such as navigation, e-maps and cargo tracking. The location-based services business has risen in popularity worldwide since 2009, when Foursquare, a location-based social networking website, set up in the United States.

Chinese companies have quickly picked up on the trend. Analysts pointed out that the Chinese market possesses great potential for the location-based services industry worth hundreds of millions of dollars.

In 2010, China Mobile set up a location-based services center in Shenyang, Liaoning province, to develop product and services for the domestic market.

China Mobile plans to invest 3 billion yuan ($488 million) over five years to build a 2.2-hectare industry park targeting location-based services in Shenyang. The industry park aims to attract software, terminal and information service partners worldwide. Currently, China Mobile's location-based services business covers various industries including navigation, transportation and logistics.

"The location-based services industry is still wide open in China. However, as the Internet and machine-to-machine technologies develop, location-based services will play a more important role and create a greater value for individuals and enterprises," said Li Hui, general manager of China Mobile's location-based services center.

China is going to be a major driver in the world's location-based services industry.

Currently, the market volume of China's navigation and location-based services is valued in excess of 80 billion yuan, according to statistics from CCID Group, a research organization under the Ministry of Industry and Information Technology.

CCID predicted China will maintain an average compound growth rate of 40 percent in the navigation and location-based services industry over the next five years.

The industry output value is expected to reach 150 billion yuan in 2015 and 400 billion yuan in 2020, CCID said.

In September 2012, China's Ministry of Science and Technology announced a plan for the navigation and location-based services industry during the 12th Five-Year period (2011-2015).

It seeks the setting up of five industrial bases across the country, nurturing 30 innovative enterprises and helping to form an industry with a scale higher than 100 billion yuan.

In addition to Chinese telecom operators, many Internet companies have started to compete for a portion of the location-based services market. Jiepang, a Chinese language equivalent to the US-based social networking pioneer Foursquare, has attracted more than 3 million users since its establishment in 2010.

Baidu Inc, the nation's biggest search engine by market share, officially set up a location-based services business unit in October last year. Shen Li, head of Baidu's location-based services business unit, said the department experienced a rapid expansion, with staff numbers growing to more than 200 in a short period.

"The launch of the location-based services business unit was in response to our customers' calls for certain services," Shen said, in an interview with Global Entrepreneur, a Chinese magazine. Baidu Map is China's most popular mobile map application with a market share of 21 percent, according to Beijing-based research company Analysys International.

Previously, Baidu Map only provided services such as searching locations. Now customers have specific demands such as asking for detailed information on the location of the best hotpot restaurant in Beijing, Shen said.

However, most location-based services projects in China are losing money, according to industry insiders. Baidu admitted its location-based services business unit had not earned any profits yet and the company could not figure out when it will make money out of the technology.

"China's location-based services industry is still in its infancy. Most projects in this phase are small and scattered so it is very difficult for companies to generate profits and support further expansion," said Wang Dongju, chief technology officer of China Mobile's location-based services center.

In addition, China needs to integrate its geographic information resources, Li Hui at China Mobile said.

"Geographic information and data are the foundations of the location-based services industry but, currently, there is disorderly competition among various Chinese information and data providers," Li said. "I suggest the country integrates resources and constructs a national geographic information system platform. Then it can offer the best electronic mapping services to the market."

shenjingting@chinadaily.com.cn

(China Daily USA07/01/2013 page14)