China’s Baidu – B2B – A Delicious Meal Or a Hot Potato?

Baidu, the leading Chinese language internet search provider, is rumored to be secretively planning a B2B platform, similar to that of Alibaba, and is to adopt free mode to competitor Alibaba (1688.HK), the top industry player in China, according to Beijing Business Today. Hu Xinran, COO of China.tootoo.com, the No.3 Chinese B2B foreign trade website, has joined Baidu recently, which was considered to be a sign Baidu is set to analyze the B2B market.

Baidu.com, has just announced his Q3 net profit, rosing 91.4 pct year-on-year to 347.9 mln Yuan, pushed by a strong paid-search business. Now it is at the summit of its strength in the search engine field, while the B2B field is confronting its transformation stage. Then does it’s an wise move for Baidu to go into b2b market in this time? Is it a delicious meal or a hot potato?

As a giant search engine in China, Baidu enjoys lots of advantages in building a B2B platform. There is a saying “dancing with the search engine” in America, which discloses the importance of search engine for e-commerce business. So enterprises e-commerce tend to depend on search engine, and more and more buyers and sellers get orders and make successful business by search engine. And search engine marketing will become a favorite for SMEs as its low threshold. Baidu can take its advantage in search engine field and adopt “cost for action mode”. Another inclination we should realize is that enterprises are eager for an independent e-commerce platform, breaking its rely on B2B companies .b This is why there is a saying “dancing with the search engine” in America, which discloses the importance of search engine for business. While Baidu’s mature internet technology can help them to build their own b2b platform and promote to the e-commerce web2.0.

This year sees both SMEs and b2b market are entering winter. Many SMEs and b2b companies are looking for their way out. The Chinese B2B Study Center releases an article, in which experts point out Alibaba is significantly a kind “Huangye Promotion Mode”, and its limitations and hysteresis will further visualize. In this sense, at the minimum three shortcomings exist. First, its effect is hard to estimate; second, this mode can just provide the basic information of sellers as its resource is limited, then the more famous Alibaba is, the more sellers are attracted, which will rule to information jam and harder transaction. Then search engine is a best choice for enterprises to use this cold winter. We can see from three aspects: at first, it can save cost for the businesses. Comparing to the year-cost of Alibaba, from several thousands to millions, it cost much less by using Baidu search engine.

And encountering the world economic depression and international financial crisis, Alibaba stock (HKSE: 1688.HK) declined heavily. While the mainstream search engine companies, such as Baidu, Goolge, nevertheless can continue their high perch in stock market, and climb continually. The industry experts, such as Wang Juntao, the father of Chinese e-commerce, points out searching engine sale is more progressive commercial pattern compared to “Huang Ye” sale mode. Then we can expect a fascinating viewing on Baidu in 2009.

Having established a trusted and successful business, e-commerce titan Alibaba should be a clear favorite to win in the B2B arena. Where Baidu could have a chance is in bundling a B2B play with its growing search marketing business. However, this is what its strength exists and where b2b e-commerce tends to develop. This is what called “E-commerce based on search engine times”.

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