"Although the road ahead is congested, you are still on the optimal route." This classic navigation prompt from Gaode is also quite fitting for Gaode itself.

The businesses Gaode is involved in are all red oceans, extremely congested. From aggregating ride-hailing services to entering the hotel, travel, catering, and other on-site services, there is fierce competition from more specialized products.

Especially, as a tool-oriented platform, Gaode Maps itself does not have a strong advantage.

During Yu Yongfu's tenure, Alibaba's local life services positioned Gaode as the "destination".

Using maps as a connection, Gaode has ventured into a large number of businesses, but none have become particularly mature or prominent. Gaode also lacks a strong cash cow to support it.

This is also a challenge left by the outgoing Yu Yongfu for the new CEO Guo Ning.

1. "Extensive but not proficient"

Gaode's business lines are extensive, but none, except for maps, have become industry leaders.

On November 5, Gaode launched its vehicle charging service at the 7th Shenzhen International Charging Pile and Battery Swap Station Exhibition. Still through aggregation, it quickly became a leading nationwide platform for finding charging stations.

Gaode is so vast that it can accommodate any business. With the increasing popularity of new energy vehicles, it is understandable for Gaode to launch a charging platform. However, as a platform tool centered around maps that connects online and offline, Gaode's business lines appear vast and loose.

A rough estimate shows that Gaode's current businesses include software tools (maps), online car-hailing and ride-sharing, ticket booking, hotel reservations, restaurant searches and group purchases, train and plane tickets, as well as gas refueling and car washes, amounting to no less than ten businesses.

At the same time, Gaode's various businesses face fierce competition, and its own advantages are not obvious.

For OTA and local lifestyle services such as hotel and travel tickets, gas refueling, car washes, and car sales and purchases, platforms like Ctrip and Meituan occupy important entry points. Gaode does not have an advantage in hotel prices, restaurant group purchase prices, or other aspects.

For example, some hotel resources on the Gaode platform used to come from Ctrip, so naturally, there would be no price advantage.

Group purchase businesses such as restaurants and entertainment have not developed either.

Searching for nearby restaurants on the Gaode platform also reveals that some have not launched group purchase packages on Gaode.

According to Photon Planet, a massage business in southwestern China earned over 5,000 yuan in verification and cancellation in the first month of joining Meituan in 2022, but only two orders totaling 100 yuan in the first month of joining Gaode in 2024.

Among the internet businesses Gaode has undertaken, online car-hailing stands out the most. According to public reports, Gaode's market share has reached 30%, and it became profitable in 2022.

Recently, Gaode relaunched its ride-sharing service.

According to reports, on October 14 this year, Gaode's ride-sharing service was launched in 65 cities nationwide. This was the first time Gaode relaunched its ride-sharing service since suspending it in 2018.

However, the current market situation for ride-sharing is that Hello and Dida occupy most of the market share. According to Frost & Sullivan data, in 2023, the top three ride-sharing platforms accounted for 96.1% of total rides, with Hello accounting for 47.9%, Dida accounting for 31.0%, and Didi accounting for 17.2%.

2. Difficulty in monetizing 800 million monthly active users

Gaode suffers from the common problem of many internet products: prioritize growth before considering profitability.

After Alibaba acquired Gaode in 2014, Yu Yongfu announced the abandonment of the O2O strategy, with no commercialization goals for the next three years. This also meant that Gaode entered a stage of rapid growth as an internet product.

A year later, Gaode Maps surpassed Baidu Maps in data and surpassed 100 million daily active users in 2018.

Currently, Gaode Maps is one of the five products with over 700 million internet users in China, namely WeChat, Douyin, Taobao, Alipay, and Gaode Maps.

In June this year, data from the QuestMobile 2024 Urban Living Circle Consumption Insight Report showed that Gaode Maps' monthly active user count had surpassed 800 million.

The most obvious contrast is that the monthly active user count has even surpassed Douyin's.

However, Gaode's commercialization ability is far inferior to Douyin's. There are two prevailing views on domestic internet products: one is that traffic is not everything, represented by WeChat's inability to deeply integrate into transaction processes; the other is that traffic is everything, represented by Douyin, which has deeply penetrated into e-commerce and other businesses in the past two years.

Gaode seems to fall into the former category.

Gaode's traffic has not been converted into commercialization ability. It was not until 2017 that Gaode transformed from a travel tool to a travel platform, launching an aggregated ride-hailing product to enter the online car-hailing market.

After 2019, Gaode began to attempt commercialization more frequently.

In September 2019, Gaode Maps announced its integration with Ele.me and Koubei, allowing users to search for the locations of catering and entertainment venues within Gaode Maps. During the National Day holiday that year, Gaode Maps expanded into scenic areas and launched the "Scenic Area Audio Guide" service. During this year's National Day holiday, it not only launched the "Gaode Guide" for tourism services in many provinces and cities but also introduced the "1 Billion Subsidies During the National Day Holiday" campaign.

In 2021, Alibaba integrated Fliggy, Ele.me, and Gaode, with Gaode becoming the core of local life services.

However, it was not until 2022 that Gaode, which had embarked on commercialization, achieved profitability. According to statistics from Huatai Securities Research Institute, Gaode currently has six profit models: technology invocation and upgrade service fees, third-party advertising fees, automaker cooperation fees, local merchant bidding fees, aggregated ride-hailing commission fees, and other additional value-added fees.

The answer to why it is difficult for Gaode to make money may lie in why Gaode can engage in almost all offline businesses but encounters obstacles everywhere.

Gaode's businesses are almost all large markets but small deals. Gaode has a presence in multiple fields but only has a shallow presence, only reaching the level of information dissemination and not deeply involving transactions.

It is similar to 58.com, which was a typical product of the PC era but was replaced by multiple vertical products in the mobile internet era dominated by LBS due to insufficient involvement in transactions.

3. How will Guo Ning plan the "optimal route" for Gaode?

Yu Yongfu's departure is a turning point for Gaode.

On March 1 this year, it was reported that Alibaba Group CEO Wu Yongming sent an internal letter to all employees of the Local Life Group (Gaode, Ele.me) announcing that Yu Yongfu, Chairman and CEO of the Local Life Group and Ele.me, would step down from his management position at the end of Alibaba's fiscal year on March 31. Liu Zhenfei, the Chairman of Gaode, took over, and COO Guo Ning became CEO of Gaode.

The new CEO of Gaode, Guo Ning, is the only executive at Gaode Group who has served as a leader in the basic platform, mid-tier platform, and business. Before being promoted to CEO this time, Guo Ning served as COO of Gaode Maps since 2023, responsible for managing the app platform business and lifestyle services section. In March 2023, Alibaba integrated Koubei's on-site business into Gaode, making Guo Ning the de facto manager of Alibaba's local lifestyle on-site business.

From Yu Yongfu's era of growth to Guo Ning's era of profitability, Gaode's approach needs to change.

Over the past decade, Yu Yongfu's integration of Alibaba's local lifestyle also drew a circle around Gaode's positioning. The early rapid growth caused Gaode to miss the opportunity to solidify its presence in various sub-sectors, leading to its later commercialization fatigue.

Guo Ning's important role at this time is to select a sub-sector and deepen Gaode's capabilities.

In fact, in 2024, as Gaode's voice in local lifestyle decreased and competition intensified on Meituan and Douyin group purchases, Gaode appeared overly calm.

Conversely, in the travel sector, it will become an area where Gaode will continue to increase its investment. Gaode's investments in ride-sharing and charging and battery swapping this year indicate that it will leverage its advantages in the travel sector.

Has Guo Ning chosen the optimal route for Gaode this time? We'll have to wait and see.