The Predicament and Outlet Faced by GPS Operation Market at Present in China

GPS-based social applications based on location-based services have had a history of disastrous operations in China for 10 years. The vast majority of operating service providers have a hard time remembering. Today, most operators are still struggling. The confusion of the entire GPS operation industry has allowed the industry to find new ideas and explore new methods for the industry. The author, as a witness to the development of the industry, tries out the current status of the industry. And the future development of personal opinion, in order to teach in the home of colleagues.

In recent years, driven by the dual demands of government management and industrial applications, China’s GPS (integrated information service based on remote transmission of positioning data) has experienced rapid development, and GPS operating platforms in middle- and mid-tier cities have mushroomed. . However, as more and more companies have flooded into the GPS operation market, due to the lag in industry management, inadequate preparation for market conditions, and disorderly market competition, many operators have already struggled to survive. It is even on the verge of bankruptcy. Small and medium-sized GPS operators are facing the choice of where to go and the dilemma of how to go.

I. New industries created by new technologies and new economy --- Current status of China's GPS operation service market

The rapid development of China's automobile and transportation industry market and its need for integrated information services and security prevention management provide tremendous space and opportunities for the development of integrated information services markets based on GPS for mobile targets. According to incomplete statistics, there are nearly 4,000 GPS operators (centers) of various scales in the country, with more than one million vehicles entering the network, and still increasing at a rate of more than 40% per year. The average annual GPS positioning terminal product sales and information service The market is expected to reach a scale of 10 billion yuan.

Three years ago, the GPS operation industry application market was mainly for special industry vehicles, taxis, high-grade private cars in economically developed areas, etc.; for three years, the GPS operation industry application market was mainly in dangerous goods carriers, long-distance passenger vehicles, logistics vehicles, and engineering. Vehicles, inland waterways, etc., and public transportation have also begun to be applied. Special-purpose vehicles have gradually become popular, and taxis have begun to fully upgrade due to the integration of electric summoning and advertising information services, and private cars have been rapidly promoted in mid- to high-end vehicles.

In particular, since 2005, local governments across the country have gradually issued documents to force two “dangerous” and “customers” to install GPS or driving recorders, which has brought about a drastic increase in the market for industrial applications. At the same time, there have also been blowouts by GPS operators.

According to incomplete statistics, there are currently more than 4,000 GPS operation companies (centers) with more than 200 network access terminal users operating in the local area of ​​the city, and just over one million users have joined the network. They are branded or chained and have a certain scale. There are fewer than 10 operators, and only a few centers have a single-centre service fee of more than 20,000 users. There are no more than 15 single-center users with more than 10,000 users, and no more than 30 users with a single-centre user base of 5,000 or more. Most operators have 500-3000 users. There are more than 10 GPS operators in provincial capitals, more than 6 medium-sized city operators, more than 20 operators in municipalities directly under the Central Government and coastal economically developed cities, and 40 GPS operators in Shenzhen and Dongguan.

Second, the road is long — miserable and sad, the dilemma China's GPS operation market is facing

1. Positioning and dislocation of operators

The positioning of GPS operators in the GPS industry chain should be a comprehensive information service provider for mobile targets, relying on satellite positioning and integrating mobile objects and their environment-related information and transmissions, through complete information collection, transmission, processing, and feedback systems for mobile. Target management and users provide comprehensive information services and value-added services.

In fact, there are many companies in the domestic operators to save investment, reduce costs, and integrate software system development, hardware terminal R&D, production, sales, and operations. They do not have to be professional operators, they are small and full, and resources are scattered and waste. Not done well.

2, a lot of product problems

GPS terminal product name å•¥ - home appliances, communications, automotive electronics?

The biggest problem affecting the operator's business is the quality of the end product, resulting in high repair rates, high after-sales service costs, and poor merchant relationships. Most of the terminal products currently used in the market are civilian home appliance quality standards, and even do not meet civilian standards. Most GPS terminal products are installed in sports cars (ships), the working environment is harsh, and the ambient temperature is -35 - +80 degrees, moisture, dust, vibration, electromagnetic and other requirements on the product is extremely high, should be designed in accordance with the automotive electronics product quality standards, production, control, therefore, the product pass rate is low, poor stability, reliability is worse. This is the most serious misunderstanding and the crux of GPS terminal products.

The quality of the product can not be overestimated - the product is not detected, it is not produced, but assembled out

Shenzhen and the Pearl River Delta are the world's electronics factories, and they are also three product-free assembly factories. According to investigations by relevant departments, many GPS terminal manufacturers do not have standard production lines, simulated environmental testing lines, and quality control procedures. They just assemble and inspect. Ship. Some assembled elite companies, known as "three-person transfer" company - to rent a 70 square meters of houses, a software engineer, a hardware engineer, a market salesman and buyer. Began selling products, OEM, OEM. This kind of product supplier will promise: Baotui, Baohuan, warranty, not packaged so that after the operator to install the customer, the rate of return will reach 300% within three years, - one-year service fee will be replaced and replaced in full, service fees All become product after-sales service costs. For the repair, repair, reuse, use again, large-scale operations into a large-scale repair, who can afford to toss, who pay the bill, operators can rely on to support the company?

Hardware becomes flawed, software becomes weak, electronic map - free lunch is not delicious, expensive feast can not afford to buy a single

Hardware problems become common problems. Software problems become infectious diseases. The current practice of GPS operation industry in application software and electronic maps is provided free by terminal product suppliers. Operators need to save investment instead of buying genuine software and electronic maps. Supplier provided pirated software and self-assembled electronic maps. The result is that the system is incompatible, the software cannot be upgraded, the map is outdated, the user is misled, the system is often paralyzed, some monitoring centers are co-existent with multiple systems, maintenance is complex and difficult, operation and use are not working, work efficiency is affected, and even hidden risks exist. At the same time, with the increase in the protection of intellectual property rights in China, intellectual property disputes will become new confusion.

Monkeys licking corn - net volume and de-netting rate - equal amount

Due to the above problems of software and hardware, the operator's service level and quality are not high, the customer satisfaction rate is declining, and the user's rate of drop-off is high. Even if the market expansion ability is strong, it is quite equivalent, the increase is slow or even decreasing, and the scale needs to be reduced. Empty talk.

Imagine the space is great, the other side is far away

Thanks to the successful operation of the paging station in the 1990s, the example of China Mobile and Unicom's communications operations, the business case of 5 million users of onstar auto information services in the US, and the huge market demand of 30 million end users in the Chinese automobile and transportation industry. The annual increase of 30% makes the operating investors irrational. Most small operating companies invest 300,000,500,000, and they require two installers, three on-duty staff, four salesmen, and 5 million inquiries. The grand plan was started, and a great goal was established. The long march of GPS sales, installation, access to the network, and services was performed. Because they did not understand China's GPS culture, they ended up with bloodshed and dismal business operations.

3, industry management lags behind

As GPS operation is a rising sunrise industry,

It is controlled and influenced by the software industry, electronic map industry, communications industry, satellite technology development, hardware chip technology, and automotive electronics related industries. The government management department has been taking a wait-and-see attitude since the early 1990s, and the industry has not established national standards. There are no standards and thresholds for market access, and market applications are rising. As a result, investors have swarmed in, R&D and production of Hundred Regimental Wars, and operators have mushroomed. Therefore, government information centers, public security agencies, traffic management agencies, transport companies, and 4S Stores, security service companies, electronics companies, software companies, engineering companies, communications companies, real estate companies, etc. have resources, conditions, and reasons to do their operations. Even many companies that do not have the resources and do not have the necessary conditions have come to operate. There is a pattern of dominating the hegemony of 10 to 40 GPS operating companies in a city.

4, disorderly market competition - in full swing

Price wars - high prices, high commissions, high rebates - low prices, high commissions, high rebates - zero profits - negative profits - zero prices for products - will be good tomorrow and will starve to death today.

Most operators are inherently shortcominged due to their low strength, and in the industry environment where the GPS operating conditions are extremely demanding, it is difficult to establish a foothold in the fierce competition based on conventional operations alone, let alone development, and they adopt some so-called special sales methods. Surprisingly winning: Reducing costs by inferior products, seizing markets with false service commitments, or deliberately suppressing competitors and disrupting market order.

Due to the fixed regional market demand and the rapid growth of operators, the melee warfare approached. The most brutal market competition is the price war. This is a suicide-style attack on the city. Finally, customers, operators, and manufacturers suffer three losses, and there is no profit without services. The industry has entered a vicious cycle. The following phenomena commonly occur:

Strong terminal agents (4S shops, institutions and individuals controlling market resources) and weak service providers; banner no flag fluttering – when princes are crippled; operating service costs increase rapidly, customers do not grow, Operators grow rapidly; product quality does not increase, off-grid rate increases, market prices drop rapidly, sales costs increase, operators have thin profits, zero profits; bosses lose large amounts of money, and salesmen make large profits; The business misleads, the operator regrets; the entry threshold of the industry is low, long-term adherence to high investment, easy to exit the door is difficult;

On the surface, China's GPS application market is very broad, but the actual application is complex. Due to the low concentration of the GPS industry, the production and operating service organizations have a weak spread, and the GPS vehicle terminal mainly enters the car after loading. In the market, because middlemen use the psychology of operator competition, the high profits of terminal products enter the pockets of middlemen as commissions. Operators have no interest or profit, coupled with low product quality and high repair rate, resulting in high cost of operators' after-sales services. GPS Unprofitable operations, the vast majority of GPS operators at a loss, struggled. It is understood that there are dozens of GPS operation companies that fail each year in the country. In Shenzhen and Dongguan alone, there have been many cases of disappearance of operators in the past two years, resulting in thousands of undocumented social events.

In short, the GPS industry chain, the terminal market demand, the rapid increase in operators, product quality is too poor, the industry is too low threshold, the competition is too miserable, a vicious circle, love and hate, a dilemma.

Third, dare to ask where the road is - more people will be the way to go

Faced with the above problems and confusion, if you do not consider the countermeasures, the GPS operation market will be aggravated and the industry crisis will be more serious. The author believes that the following approaches should be taken into consideration:

The industry chain implements specialized division of labor—design, R&D, production, operation, and service—for each segment of the railway police; the operational market needs to be integrated, united, and aggregated to achieve specialization, industrialization, scale, and order; market segmentation - -Differentiation and specialization; Operators develop value-added services, innovation services, and integration services; establish non-governmental organizations, strengthen self-discipline in the industry, and provide supervision; and set up conditions for the entry of operators' capital, talent, technology, quality, rules, and responsibilities.

The quality of terminal products is the fundamental guarantee for the survival and development of operators. Industry-professional automotive electronics manufacturers who need to know the automobile culture in accordance with super-industry-level standards will implement large-scale production. On the one hand, they will solve the problems of product stability and reliability, and increase the service life of products. On the one hand, reducing production costs, operators' after-sales service costs will be greatly reduced, customer satisfaction rate will be improved, and marketing will be faster.

The system software platform solves the information interaction technology compatible with various brands of terminals, and enables the docking of the customer terminal and the docking of the platform, satisfying the information service needs of different users, and reducing the repeated investment of the operators;

Small and medium-sized operators need to unite and join hands to take the road of cooperation in joint operations, brand operations, custody operations, and franchise operations, and achieve scale and standardized operations.

Regional operators consciously organize inter-association associations to solve the problem of disorderly market competition, implement industry self-discipline, standardize market behavior, jointly resist counterfeit and inferior products, and resist unfair competition behaviors; formulate industry standards for market-entry operating companies and promote survival of the fittest; promote operators' innovation Service, improve service quality and level;

To realize the localization, timeliness, and networking of customer services, all brand operators jointly set up a nationwide integrated operation network with small and medium-sized operators to realize end-customer nationwide non-blind service. Introduce the service concept of insurance, communications and banking.

Fourth, ask the vast land, who is the master? Industry Calls Sun Liu Cao - Market Returns to Three Kingdoms

Hangsheng Electronics Group, as a Chinese automotive electronics gold medal company and an internationally renowned supplier of automotive electronic products, has grown in strength along with the growth of China's GPS, and today has an annual production capacity of 5 million sets of automotive electronics. 2006 Automotive Electronics The sales volume of the products has exceeded 2 billion yuan, and it has become a leader in China's automotive electronics industry.

In 2006, Hangsheng Electronics promoted the rapid development of the GPS industry, based on its own patents, products, technology, production, quality control, service network, brand, pre-installed market advantages, integration of industrial resources, build GPS system development, terminal production, pre-installed supply , After sales, joint operation, integrated service industry chain group platform, United Asia Video Co., Ltd., established Hangsheng Mobile Video GPS Operation Group in Shenzhen, through the United Nations small and medium-sized GPS operators, using Hangsheng "cruising guards" advanced Systematic technological transformation of various operational monitoring platforms, through capital operation, joint, integrated, and reorganizing small and medium-sized operation centers to achieve specialization, standardization, and scale operations, and provide operators with images, driving recorders, and DVRs that meet the automotive electronic quality standards. , RFID and other multi-function integrated GPS terminal products, while opening up the automobile front loading market, allowing franchise operators to free themselves from the plight of post-installed market products, focusing on improving operational service levels, expanding the scale of operations, and jointly building China's GPS operating aircraft carrier, Developing China's largest mobile GPS comprehensive information service Chain operator network.

The Hangsheng Group’s strategy undoubtedly suits the wishes of the Chinese GPS operation market. I hope that within three years, three to five companies such as Hangsheng will have the overall advantage of the industry chain to jointly guide the healthy development and orderly competition of the Chinese GPS industry. Promote the development of intelligent transportation and security technology to promote social progress.