On July 6th some in our group have pointed out how Google is gradually pulling out of China and Baidu is the strongest presence (today also with the collaboration of Bing).
However what is the future today of the fastest growing internet economy of the world? Does Baidu really have a sustainable competitive position in the Chinese market?
Despite a surprisingly strong market share of 75.9% on the Chinese market in Q2 2011, some experts point out that this share might be shrinking over the next term and that 2 increasingly strong companies are challenging Baidu's position. Alibaba Group’s e-commerce search engine Etao.com and Sina Corp.’s microblogging service Weibo.com. Etao.com started off as a focused player and Weibo.com is not positioned on search today. However, Etao.com has recently started adding other products to its search engine and Weibo's Twitter-like microblogging service has a strong customer base, which could be leveraged to offer an increasing number of services.
Etao.com and weibo.com will not represent a threat for Baidu in the search engine segment, however the increasing volume of customers and transactions could exacerbate the competition for ads and users.
Baidu's response has been to try to differentiate tapping into the competitor's domains. However it was not able to win the game on these segments yet..
Curious to see how the competitive scenario evolves....
1 comment:
Ultimately, no US Internet company will be able to compete in China because of the government's tight grip on the web. The best historical example of the Chinese government's strategy is Rupert Murdoch's failed attempt to enter the Chinese television market through Star, which ultimately resulted in Murdoch ceding control in 2010.
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