Geofencing in the GCC and China: A Marketing Trend That’s Not Going Away

Fadye Saud AlFayad


This research discusses an emergent marketing trend which is revolutionizing the way in which bricks and mortars retailers are reaching their consumers. This emergent marketing trend falls into the mobile marketing classification and is identified as geofencing. Geofencing is identified as the development of a virtual boundary around a predetermined area be it a single building, shopping center or a section of a municipality. This boundary is developed through the combination of geolocation technology involving GPS, smartphones and the integration of other communication based services such as text, email and social media and so forth. A case study involving the use of a geofence by a bike-sharing company in China, ofo, is utilized to demonstrate how geofencing can be integrated into particular business models. In this case, ofo uses geofencing to monitor specific bike inventories by area and to ensure that its consumers in each area return the inventory to the appropriate market. This case, in turn, is then compared to how geofencing can be developed and applied in a market as diverse as the Gulf Cooperation Council or the GCC which consists of six member states with Saudi Arabia being the largest and most important. In this instance, the use of a geofence and geofencing technology is shown to be relevant with respect to Saudi Arabia’s retail sector which is burgeoning at a rapid pace. Geofencing allows retailers to notify consumers directly via SMS, MMS, email or social media notification of some sort of specials, sales or discounts at a given retailer when the consumer passes near that retailer. Finally, this report also discusses the direction that this geofencing technology within the context of marketing is taking and may take in the future. This includes some discussion about the integration of augmented reality into the framework of geofencing and so forth.

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