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Eleme, which has 83 million monthly active users, is owned by technology giant Alibaba, which also owns Taobao, one of the world’s largest e-commerce platforms. Eleme says that since the new system became available in hundreds of Chinese cities starting in 2018, it has saved merchants $8 million in refunds to customers for issues with their delivery, including delays.

To build it, Eleme needed to find a cost-effective system that worked indoors. GPS is accurate up to five meters outside, but walls, furniture, and even people disrupt its signal. “It’s also really bad at altitude,” he says Pat PannutoProfessor of computer science at the University of California, San Diego. This is a problem because most urban retailers in China are in high-rise buildings.

Indoor localization systems based on Wi-Fi and radio frequency identification work, but Bluetooth is by far the cheapest and most reliable option. Its accuracy is about 10 meters, good enough to detect people entering a shop or restaurant.

In early 2018, Alibaba placed more than 12,000 Bluetooth beacons in stores in Shanghai. Beacons emit signals that are received by drivers’ phones in the form of “identity bundles”. The application uploads each bundle to the servers of the platform where it is matched with vendor IDs, and the system logs where and when the signal was sent.

Similar networks are widely used to track goods, people and services. One of the largest is at London’s Gatwick Airport, where around 2,000 Bluetooth beacons are installed. But Eleme’s is one of the first to be built on a city scale.

Alibaba has taken advantage of the fact that mobile phones can also act as Bluetooth beacons to bring its system to more cities in China. Apple introduced this functionality for iOS devices in 2013, and similar features are now widely available on other smartphones.