The location-based services (LBS) market has, in recent years, expanded beyond simple navigation to location-based tracking, infotainment, search and advertising, analytics, indoor LBS, recreation and fitness, and several other applications. Consumers can now access information about the nearest ATM machines, fuel stations, taxi stands, pharmacies, theatres, restaurants, and traffic and weather conditions through these services. According to Research and Markets, the overall LBS market in India is likely to achieve a compound annual growth rate of 58.61 per cent during 2014-19.
LBS market in India
The robust growth being witnessed in the LBS market can be largely attributed to the increased adoption of these services by various industries. The location-based application and device market in India is diverse in terms of usage. On the consumer front, these services can be used for entertainment, information, social networking, mapping and navigation, security, commerce and augmented reality. For enterprises, LBS can be used for fleet tracking, inventory tracking, asset management, field force tracking, mapping and machine-to-machine communications.
Industries are increasingly adopting LBS devices and applications to enhance the efficiency of their supply chain operations. These applications are also being used to track vehicle and stock movement, and for inventory management. The retail as well as food and beverage industries are two major segments that are increasingly using LBS. Applications such as Zomato, Swiggy, foodpanda are some of the key growth drivers for LBS in the food and beverage industry. Further, applications like BigBasket and Grofers use LBS to deliver grocery and other household items at users’ doorsteps. In recent times, applications like Ola and Uber have come up, which use LBS to facilitate user commute. Applications such as Google Maps too are extensively using LBS to offer navigation-based services.
Key growth drivers
There are many factors that have led to the surge in the adoption of LBS in the country. These include the growing uptake of mobile positioning systems, the rise in geographic information system (GIS) content for LBS, increased internet adoption, growing operator interest in offering value-added services (VAS) and greater user awareness.
Growing uptake of mobile positioning One of the key growth drivers of LBS is the increased adoption of global positioning system (GPS)-enabled devices in the country. A GPS accurately identifies geographical locations by receiving information from GPS satellites. The adoption of GPS-enabled devices such as smartphones, tablets, hand-held devices, wrist-worn devices, sports devices and portable LBS devices has increased significantly over the past few years. This is because GPS-enabled smartphones have become cheaper and telecom operators are increasingly investing in network-based positioning technologies like cell id, enhanced cell id and wireless location services to make mobile positioning more accessible. Moreover, the increasing availability of cheaper China-based 3G/4G-enabled handsets has provided more opportunities for LBS application developers on a significantly large scale.
Surge in GIS content for LBS: LBS-ready GIS content was not available until a few years ago. However, the scenario has changed now, with both the quality and coverage of maps and related GIS content having improved significantly for most LBS solutions.
Increased internet adoption: Another major driver is the increased adoption of mobile internet. Most operators have already launched their 4G services across the country. As a result, many more users can now access LBS-enabled applications. Further, growing internet adoption has encouraged application developers to come out with more such applications.
Increased operator interest: As the ARPU from voice-based services continues to be low, operators are keen to devise better ways of revenue generation. The increased adoption of 3G/4G services also implies a greater focus on newer data-rich VAS services like LBS. This presents a big opportunity for telecom operators as well as developers of LBS applications.
Increased user awareness: The surge in the adoption of LBS has also been facilitated by the growing user awareness about latest mobile applications. Users are not only becoming increasingly more aware of applications such as Zomato, foodpanda, Uber and Ola but are also using them for meeting their day-to-day needs. Moreover, with exposure to map-based services like Google Maps and Nokia’s pre-embedded navigation, people are now ready to explore LBS beyond just maps and navigation.
Regulatory support
In addition to the industry and consumers taking an active part in the adoption of LBS, the government too has been playing a proactive role in supporting its growth. In April 2016, the Department of Telecommunications (DoT) mandated that an inbuilt GPS navigation system should be made compulsory for all phones sold in the country from January 1, 2018. At present, only smartphones come with an inbuilt GPS system. As per DoT’s order, no handset manufacturer can sell a device without the facility to identify the location through satellite-based GPS.
Issues and challenges
Despite these growth drivers, the LBS market in India faces many challenges. The provision of LBS requires a well-integrated ecosystem with active participation from telecom operators, technology providers, vendors and customers. Even though operators in India have the network capability to introduce mobile advertising targeted at specific subscribers, they have not been able to build the necessary ecosystem to exploit the true potential of LBS. Besides, there are other impediments that prevent LBS from taking off in a full-fledged manner. These include privacy issues such as customer authorisation for allowing their location to be mapped and the presence of multiple stakeholders in the LBS value chain, ranging from mobile device suppliers to content providers.
Moreover, telecom service operators have been unable to come up with a well-defined plan to monetise LBS. Given
the fact that most of these services are provided free of cost with only data charges incurred by users, the absence of a robust revenue model would continue to hinder the growth of LBS.
Another challenge that the market faces is the lack of updated, reliable and accurate information. Consumers using LBS usually expect real-time information. However, due to the lack of updated information about a region’s infrastructure, LBS-enabled applications end up providing outdated data. This anomaly is mainly because of the lack of content providers on a regional level.
Another key challenge for LBS has been the monetisation strategy for pop-up advertisements. Users prefer relevant content and the presence of too many advertisements on their devices only makes them uninstall the application.
Going forward
In a country like India, LBS offers many opportunities to transform the way services are delivered. Given the multidimensional benefits of location-based information, operators and vendors should consider LBS as an asset and make investments to exploit, use and market them. LBS has opened up many avenues for vendors to increase their brand visibility and exploit the huge market for mobile advertising in India. They can also use location-based data to make informed adjustments in their businesses, which can help them improve user experience and customer service.
In addition, the government’s Smart Cities Mission presents a plethora of opportunities for LBS. Smart cities around the world have been using GIS and LBS to obtain useful information for better planning and process automation. In addition, LBS-backed geospatial infrastructure helps decision-makers to gather real-time information, which can be used by city planners for further development. LBS also enables the authorities to receive, record and analyse location–based data to ensure the safety and security of citizens and assets, and use such information for delivering citizen-centric services like traffic advisories and emergency services. Citizens living in smart cities can also bank on location services for getting day-to-day information such as city routes, public transport schedules, traffic condition, breakdown zones, toll roads, speed limit and parking places.
Clearly, the scope for LBS is immense and the opportunities plenty. The next few months should see increased activity in this space.
Kuhu Singh
