Alibaba acquires Chinese mapping giant AutoNavi in $1.5bn deal

We already knew it was on the cards, but today it’s official. China’s e-commerce behemoth Alibaba is acquiring mapping and navigation company AutoNavi in a deal valuing the firm at $1.5 billion. The company had previously acknowledged Alibaba’s proposal, saying it was forming a committee of independent directors to consider the proposal.

Of course, Alibaba already owned a 28 percent stake in AutoNavi, so the two companies were closely aligned anyway. But by bringing the company fully under its wing, it’s going all in with maps, in what is a thinly-veiled shot at fellow Chinese giant Baidu which has been bolstering its own mapping tools in recent times.

Strengthening its position in maps also suggests that Alibaba is keen to develop it as another prong of its mobile strategy, given that maps are a key part of a typical smartphone user’s habits.

Alibaba CEO Jonathan Lu says in the announcement that it will work with AutoNavi to “further integrate mobile commerce into the lives of (its) consumers.” Though no specific details were revealed, it seems like this move will expand on the mapping service within its Taobao shopping site, introduced in 2012, which displayed information about local businesses and discounts within maps.

Throughout 2013, Alibaba already took steps to woo consumers to shop on their mobile devices, and maps will make it more convenient for users to pinpoint location-based deals.

In October last year, Alibaba announced that it would give certain mobile users free access of up to 2 gigabytes of data in November and December, when they shop with Alibaba’s apps for the company’s Taobao Marketplace, Tmall.com, Juhuasuan, Laiwang and Alipay.

Subsequently in November, the e-commerce giant launched a scheme to give away free smartphones as part of its efforts to encourage merchants to shift from PC-based online shopping to shopping via mobile phones.

The Alibaba-AutoNavi deal is expected to close in the third quarter of 2014.