Chinese Internet firms dig big data gold

Chinese Internet companies have been exploring business opportunities based on big data analytics during the world's largest human migration.

Baidu, China's top search engine, launched a real-time migration map during the Spring Festival travel rush, which the Ministry of Transport estimates will witness 3.62 billion trips before it ends on Feb. 24.

The "Baidu Migrate" heat map gathers data from smartphones installed with Baidu Maps or other applications using Location Based Service (LBS) platforms, which receive 3.5 billion position requests every day in China, according to Baidu.

By analyzing the mass data, the map depicts the most popular destinations, points of origin and travel routes throughout the country during the Spring Festival.

It shows the trip between Chengdu, capital of southwest China's Sichuan Province, and Beijing has been the most popular travel route, which surprised many Internet users.

Giving the general public such insight on social phenomena is just one of the applications of big data, which refers to collection of enormous sets of data that can not be analyzed using traditional processing. The statistics can also be used by businesses and governments to look at trends and optimize service.

It is hard to put a figure on the estimated value of this emerging market, but online enterprises are eager to harness big data's potential.

Baidu is not the only Internet company in China digging the perceived goldmine. Alipay, the country's largest third-party online payment platform under ecommerce giant Alibaba Group, set up a similar program last month.

Another Alibaba subsidiary, key consumer-to-consumer sales platform Taobao.com, also took a share of the spoils. It released Chinese migration data for the whole of 2013 that was based on analysis of changes to users' default delivery addresses.

POTENTIAL

Nevertheless, it is Baidu's real-time migration map that has really manifested the power and scope of big data analytics, especially for business and social management.

According to the China Internet Network Information Center, the country has about 500 million mobile Internet users, accounting for 81 percent of all its web users as of the end of 2013.

Statistics professor Sun Feng with Tsinghua University said the fact that most Chinese people have mobile phones today makes collecting large and complex data more time-efficient and cost-effective for Internet companies.

As more large-scale data is built up, analyzing it is likely to become more profitable, added big data expert William Huang, who works with a top Chinese firm that he did not wish to be named.

The potential of this market has not gone unnoticed by small Internet enterprises in China.

The owner of one such firm, a man surnamed Yao, told Xinhua he had designed an app on which users can express opinions about popular TV shows. Yao's team can analyze this data and sell the results to interested parties.

"Users expect better experiences now, so we want to know who they are and give them what they need," said Huang.

He explained that after acquiring information about netizens' favorite restaurants, Internet companies could recommend similar places to them through apps or other products and attract restaurants to post adverts.

More opportunity is found in business district management, according to Deng Zhongliang, an expert on LBS at the Beijing University of Post and Telecommunications.

"For example, in a certain business district, if the migration map shows it is crowded in some shopping malls and empty in others, we could optimize resources allocation based on this data analysis," said Deng.

According to Taobao.com, people's online footprints could mirror their movements in the real world.

Its latest data showed that among tens of millions of Chinese migrant workers using Taobao, the growth in those moving to Beijing slowed by two-thirds year on year in 2013.

Meanwhile, last year witnessed nearly 1.53 million Taobao users moving to south China's Guangdong, the most attractive province for migrant workers.

"This data could help government decision making," Deng noted. "Big data analytics also benefits megacities like Beijing in population management, material supply and traffic congestion monitoring."

RISK

But Huang pointed out there are privacy concerns to big data's use.

"Users should have to opt into location services first before their information can be collected. But many worry their private information will be sold on by irresponsible enterprises," he said.

Baidu's response to such criticism is that the big data it collects does not correspond to individuals' true identities. In other words, such systems concentrate on group trends rather than personal behavior, so they will not threaten people's privacy.

Easing privacy concerns nevertheless requires improved laws and regulations as well as self-discipline among enterprises, said Deng.