Why are there opportunities in location-based services?

According to a location-based media company JiWire, 53% of the "on-the-go" US audience are willing to exchange their location for more relevant content and better information, including mobile deals.  And this "on-the-go" audience, which comprise users of notebooks, tablets and smartphones out of home or workplace is GROWING.

In one of my recent posts, I wrote about how content consumption has gone mobile as mobile is personal and always near.  As we are always on the move, context in whatever we are doing (or could be doing), where ever we may be, becomes important to us amidst today's time-starved world.  With GPS, cell-ID location tracking in mobile devices like smartphones and tablets are increasingly availed in the hands of the consumers of today and tomorrow, and data plans becoming more affordable, it comes with no surprise that there is increasing interest from on-the-go consumers in:

1. checking into locations via mobile for achievements or rewards,
2. searching for information more online via mobile (even while in the shops!),
3. or buying products and services while on the move.

Let's have a look at some key market growth trends in location-based services.


Location-based Apps and check-in features are garnering interest in mobiles

• According to Pew Internet & American Life Project report (availed via this link) released recently 6-SEP-2011, 5% of all  US cell owners or 12% US smartphone owners use geosocial check-in services like Foursquare or Gowalla.
• With Twitter, Foursquare, Gowalla and Facebook "Places", consumers are sharing to show-off their "Fab life"
• Mainstream audience:  amongst 20 to 34 year olds, privacy appears less of a concern.
• Secondary audience: 35 to 44 year olds who have higher spending power.
• Emotional drivers focusing on the mainstream: gamification and social leaderboards are being used to engage consumers on the move.
• Rational drivers largely to the secondary audience: price comparisons through daily deals, location-based promotions.

Group buys through social sharing and mobile coupons and local deals are growing

• Players include Groupon (more than 30M subs globally), are expanding into Asia through acquisitions.  In Singapore, Groupon acquired Beeconomic the #2 deal site in April 2010 and is now #1.
• Local deals and ecosystem players in Singapore like deal.com.sg and Chlkboard are growing mind share and market share with advertisers.

Many players are looking into being your mobile wallet

• Facebook credits for virtual goods now (in social games) - what about physical products in the future?
• Paypal account - to order your takeaways
• Operator (carrier) billing for lower price tiered products - both virtual and physical
• Retail POS like VISA Paywave contactless paymenbt, MasterCard PayPass for tap and go convenience

Singapore shows strong growth in mobile subscribers and value-added services

• In Singapore, IDC forecasts that the number of Singapore mobile subscribers will increase at a 3.9% CAGR to reach 8.3 million by 2014, pushing the penetration rate from 140% in 2009 to 163% by 2014. 
• Much of this growth is expected to come from the take-up of non-voice services, prepaid subscriptions (comes with data) and the proliferation of multi-sim cards (multi-device ownership - tablets, smartphones, mobile broadband).

Location-based services are going mobile and social (Lo-So-Mo).  The ancillary channels to businesses and potential ancillary revenue streams are only emerging at this point.  I will be writing more next on the various players in the location-based services value chain. 

Meanwhile, I would be most interested to hear more on your views on how location-based services are taking off in your market.

Talk soon,
Nelson Wee
Connect with me on Twitter @nelsonwee

References:
1. Definition of location-based service
2. Location Based Services Usage; Perception Survey from Microsoft
3. Nearly 1-in-3 Adults Use Location-Based Services