Baidu: Beefing Presence Beyond China

China has the largest Internet population in the world at 420 million and 99 percent of them use Baidu, according to Robin Li, CEO of China’s largest search engine.

Baidu’s search market share continues to rise — up from 73 percent to 75.5 percent between Q3 to Q4 last year — eating into rival Google’s market share, which fell from 21.6 percent to 19.6 percent in the same period, according to the latest report from China research firm Analysys International.

Baidu clearly dominates the China search market. But does it have ambitions to grow outside the country? Recent developments suggest it is strengthening its presence beyond China.

The Rakuten Alliance

Rakuten, Japan’s largest e-commerce company, and Baidu announced a strategic partnership in January 2010 to invest $50 million over three years to build a new online retail site that launched in October the same year called Lekutian.

The joint venture aims to create the largest B2B2C online shopping mall for consumers in China to buy high quality products from well-known Chinese to foreign brands including small and medium-sized businesses.

In Japan, Rakuten has around 64 million registered members and 2009 sales totaled $3.2 billion. Its core business “Rakuten Ichiba” is said to offer 50 million products sold by more than 33,000 merchants on the country’s largest e-commerce site.

As part of global expansion, Rakuten was involved in a number of acquisitions last summer, including PriceMinister, France’s largest e-commerce company, and U.S. e-commerce site Buy.com. Rakuten also entered a joint venture with Global Mediacom to tap Indonesia’s e-commerce marketplace. Six years ago, Rakuten acquired U.S. ad network LinkShare.

Backed by Rakuten’s ties in Europe and the U.S., the Lekutian partnership will help Baidu raise its international profile in e-commerce and search.

Outside of China, Baidu’s search service has been available in Japanese since 2007.

Tapping the rising trend of Internet savvy youths on discussion forums commonly known in Asia as Bulletin Board System (BBS), Baidu launched its Post-Bar or Tieba, an Internet forum in the country last August.

Reseller in 4 Asia Markets

In other parts of Asia, Baidu appointed China Search in October 2010, as exclusive reseller to provide paid search solutions for companies in Hong Kong, Taiwan, Singapore, and Macau.

Bob Tin, director of China Search, said they have been in talks with clients and those from the travel, e-commerce and jewelery sectors were keen and some are committing as much as eight-figure RMB annual search budgets on Baidu.

However, will Baidu capture a significant portion of the SME segment through this exclusive agreement? And will they consider appointing more resellers to expand in other markets of Asia, Europe, or the U.S. in the near future?

Baidu Beat

Baidu launched Baidu Beat, its English-language blog, earlier this month.

But Baidu says its blog “does not represent the official position of Baidu or its officers” even though it’s written and updated by its employees.

Baidu Beat won’t be used to make any initial disclosures by the company or any of its subsidiaries or related companies, which means tough luck if you’re looking for breaking news there.

The blog aims to give readers a peek into what Chinese Internet users are looking for online, aggregated through individual search queries from its search engine, topical issues discussed on its online community Baidu PostBar, and queries from Chinese Internet users through its Q&A site Baidu Zhidao, or “Baidu Knows.”

To attract an international following, @BaiduBeat has more than 140 followers and more than 50 Facebook fans since it rolled out less than a month ago.

Does having an English language blog indicate Baidu has ambitions to beef its presence globally?

At the Web 2.0 summit Li said America isn’t a high priority market for Baidu although he wanted the U.S. to pay attention to China. He hinted they would add different languages for the search engine in the future. Li’s answer seems to suggest Baidu is seeking to expand in Asia initially, rather than potentially go head to head with Google on its home turf in the U.S.

If you’re keen to track trending topics or brands that China users search on Baidu, check out Feng Yun Bang, a listing site updated in near real time that shows top searches in different categories from people, entertainment, lifestyle, cars, games, computers, education to finance by day, week or month. Some categories even trend by demographics (e.g., those born in the ’70s, ’80s, or ’90s, males vs. females), although right now it’s only available in Chinese.

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