With the official launch of Baidu's Youa, a C2C e-commerce site under Baidu that works very much like Alibaba's Taobao, the two companies are now in direct competition. When trying to predict the outcome of this battle, it's worth a brief look back at each company's accomplishments.
With the official launch of Baidu's Youa, a C2C e-commerce site under Baidu that works very much like Alibaba's Taobao, the two companies are now in direct competition. When trying to predict the outcome of this battle, it's worth a brief look back at each company's accomplishments.
Baidu continues to rely on other companies' innovations for its own core business. (Blogger Imagethief playfully labels Baidu's business model a "search engine with Chinese characteristics".) Youa takes its "inspiration" from Taobao as much as Baidu's search engine drew from Google. Baidu is a leader in search primarily in its ability to market to Chinese users and companies, but the recent Sanlu milk powder scandal and ongoing lawsuits against its mp3 downloading service are hurting its carefully built image.
Alibaba, on the other hand, developed a B2B e-commerce model specifically for China, beating out competitors by eliminating transaction fees and building trust among buyers and sellers and by understanding the how important the payment link was to a successful e-commerce business. Through With its innovative escrow service, Alipay has helped Taobao solidify its position atop China's C2C e-commerce market.
I think Baidu's real focus needs to be on search, not e-commerce. Google is only getting stronger and surely counts China among its most critical markets in the long term. Baidu needs some innovation of its own. If the company really does understand the Chinese market as well as it claims, let's see more products and services designed specifically for China's hundreds of millions of netizens. If Baidu thinks there is a future in turning potential partners into serious competitors, it's going to have its hands full with Google.
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