Eleme, which has 83 million monthly active users, is owned by the tech giant Alibaba, which also owns Taobao, one of the world’s biggest e-commerce platforms. Since launching the new system in hundreds of Chinese cities starting in 2018, Eleme says, it has saved merchants $8 million in refunds to customers for problems with their deliveries, including lateness.
To build it, Eleme had to find a cost-effective system that works indoors. GPS is accurate to five meters outside, but walls, furniture, and even people disrupt its signals. “It’s also really bad at elevation,” says Pat Pannuto, a computer science professor at the University of California, San Diego. That’s a problem because most urban retailers in China are in multistory buildings.
Indoor localization systems based on Wi-Fi and radio-frequency identification do work, but Bluetooth is by far the cheapest, most reliable option. Its accuracy is roughly 10 meters, good enough to detect people walking into a shop or restaurant.
In early 2018, Alibaba placed more than 12,000 Bluetooth beacons in shops across Shanghai. Beacons emit signals that are picked up by drivers’ phones in the form of “ID tuples.” The app uploads each tuple to the platform’s servers, where it’s matched with merchant IDs, and the system logs where and when the signal was sent.
Similar networks are widely used for tracking goods, people, and services. One of the largest is in London’s Gatwick Airport, where around 2,000 Bluetooth beacons are installed. But Eleme’s is one of the first to be built out on a city scale.
To take its system to more cities in China, Alibaba exploited the fact that mobile phones can also act as Bluetooth beacons. Apple introduced this function for iOS devices in 2013, and similar features are now widely available on other smartphones.