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Rising disruptors in Chinese intelligent mobility landscape

As well known, today’s consumers have several alternatives to address their mobility needs. This is all the more true in China. An entirely new mobility service -centric segmentation enabled by technology development is rapidly emerging. Innovations are happening in the sphere of car sharing, ride sharing/car pooling, ride hailing and  micro transit. Particularly on-demand mobility services landscape is expanding. For example, bike-sharing services are emerging as a short-distance mobility option in Chinese urban cities. The market is now flooded with new entrants.

Today we are witnessing an era of connected mobility 2.0 in China. For the services point of view it means that we see emergence of more premium car-hailing services, car-sharing and car-pooling services. Next wave of connected mobility is expected to start in few years and it will mean digitalization of the entire transportation portfolio including commercial fleets (Internet + Transportation). As regards the vehicle connectivity, this means contextualized experience: AI-based personalization with seamlessly connected systems. And when it comes to mapping and routing, the change means sophisticated machine learning and data analytics for instance for high definition mapping and inter-modal routing. High automation of driving with smart, electric and connected vehicles with hybrid owner usership model is estimated to be common in China by 2021.

Personalized user experience

What is actually transforming is the user experience. For consumers the motivation of usage is quality and comfort of journey – development which is increasingly driven by personalized and contextualized experience - AI-based personalization with seamlessly connected systems. Previously the users of for instance car-hailing services have been mainly from young age groups, but in few years time the user base is estimated to be as large as the mobile internet adoption in China. Mobile internet is penetrating into every aspects of our daily connected lifestyle. Sleeping, working, travelling, shopping, watching TV, entertainment, sports, everything is part of future connected lifestyle. Mobility is a slice of this lifestyle with valuable data which can be monetized for personalization.

Key features of chinese mobility services

China’s mobility service landscape is significantly different from the rest of the world. The unique characteristics of the  market include:

  • Book a ride: Besides using ride-hailing apps, users can also book a ride in China through WeChat, Alipayand Baidu Maps (through API without downloading the apps). Service providers offer subsidies to attract new registered users
  • Consumer motivation: O2O services are common in China even beyond connected mobility. Many are encouraged by subsidies and the convenient, cashless experience. Some drivers are socially motivated to drive for meeting new people. Chinese consumers might be more open to usership due to severe pain points associated with car ownership.
  • Social engagement: Chinese users often share discount code and links on social media in order to get extra subsidies for successful referral. Didiusers can play mini-games on Didiapp when they are waiting or in the car. Didiusers can gain virtual “coins” for completing each ride and giving the driver a rating.
  • Pricing and payment: Most are sensitive to the price surging model. Full integration with local mobile payment solutions (e.g. WeChat wallet and Alipay) is critical for a seamless connected experience, physical fapiao (receipt) is often expected for business travelers

Relevance for Finnish companies

There are potential matching value propositions for Sino-Finnish collaboration in intelligent transportation. Finland already has a large pool of talents specialized in digital technologies and sustainability, forward-thinking concepts in intelligent transportation such as MaaS and Whim, strong support the Finnish government, potential pilot test-bed for autonomous on-demand mobility service from China, “Nordic DNA” with strong focus on sustainable lifestyle, clean tech and green transportation.

China has massive but addressable mobility service market, high penetration of mobile internet and openness to adopt new digital services especially among younger Chinese population. At the same time increasingly severe urban mobility pain points present lots of untapped opportunities. There is demand from Chinese mobility companies for more overseas advanced technologies such as big data analytics, machine learning, dispatching algorithm, self-driving technologies etc.

For details, see Future Watch strategy  brief under the related links.

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