Alibaba’s Free Wi-Fi Deployment Plan accelerates mobile user growth

Written by Fiona Zhao || July 2014

With the increasing usage of mobile devices such as smartphones and tablet PCs, mobile internet is becoming a new traffic entry point for many internet players. Alibaba's free wifi deployment will facilitate their entry point.

According to the data from Ministry of Industry and Information Technology (MIIT), by the end of 2013, there were 580 million smartphones in China. Domestic users spend 46% of their mobile internet time using Wi-Fi and commercial Wi-Fi is becoming an essential traffic entrance. With this in mind, internet giants such as Google, 360, Tencent and Xiao Mi, are launching their Wi-Fi offerings to earn new offline entry points. So is Alibaba.

As known from our previous commentary "First e-Commerce, now Hospitals - How Alibaba is changing lives in China”, one of Alipay’s strategies this year is to open up its platform for O2O business. The hospital plan is one example. Providing free Wi-Fi service is another channel.

On May 20th, Alipay announced a cooperation with WiTown, a commercial Wi-Fi service, to roll out a free Wi-Fi plan. According to the plan, Alipay will cooperate with merchants and router providers to serve users with free Wi-Fi in public spots. The covered areas include KTVs, movie theaters, places of interest, airports, restaurants, etc. Shortly after, HiWi-Fi, a wireless router provider, will join Alipay in this free Wi-Fi plan. In addition, Hi-Spider, which provides Wi-Fi for bank outlets and internet bars, have displayed interest in Alipay’s free Wi-Fi plan.

It is said that the first phase of the project will be launched in June. According to the project, Alipay wallet will 1) send out free Wi-Fi notice to users when users are passing by or entering into a merchant outlet. It has been emphasized that the notice is soundless. In addition, when users are off the Internet reach, the notice will disappear automatically 2) when users click on the free Wi-Fi notice, a list of nearby merchants will be shown. Users can click to connect without entering a Wi-Fi password 3) once a connection is established successfully, a merchant webpage will be shown.

The purpose of Alibaba entering the Wi-Fi provider field is to connect online and offline access points is to help merchants find, understand and serve customers accurately. However, in the mobile era the Internet market is divided rather than being monopolized by several giants like in the PC era. What Alibaba can do now is to search for more partnership opportunities. In addition, the O2O business is still in the primary stage, free Wi-Fi certification process is complicated and there also are potential safety issues. Before Alibaba perfects the free Wi-Fi service and brings the customer satisfaction to its famous high level, we believe the company will not launch widely.

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