3 Reasons eBay China Partners Baidu
eBay recently announced to partner Baidu in China. The agreement between Baidu and eBay China (eBay Eachnet) includes the three major areas below:
- Baidu is to promote Paypal Beibao, PayPal’s service in China, as the preferred online payment mechanism on the Baidu Points platform.
- Baidu is to become the exclusive provider of text-based search advertising on eBay Eachnet. The testing of this text-based search advertising feature is expected to start in Q1 2007 with the full implementation in place by Q2 2007.
- Baidu and eBay Eachnet are to develop a co-branded toobar. The toolbar will let users to click on an eBay EachNet icon directly from the Baidu toolbar menu and be redirected to eBay EachNet’s online auction.
I believe joining forces with Baidu is the right move for eBay’s survival in China. eBay’s market share in China has dropped from 90% to just below 30% in less than 3 years in which eBay’s biggest Chinese rival Taobao.com is currently in possession of over 50% of the Chinese auction sector since its launch in 2003. Here are the five reasons that eBay China desperately needs to partner with Baidu:
Reason #1: eBay needs exposure on Baidu
With this partnership I expect eBay.com.cn to rank better across the board on Baidu’s search engine result pages, at least due to a higher publicity effect that Baidu will give eBay Eachnet. Whether Baidu will technically help eBay Eachnet in optimise its web pages will be another interesting expectation.
Ranking well on Baidu is more important than ranking well on Google China, as Baidu currently has a larger search market share than Google in China. Also see Baidu Gaining 2006 China Search Market Share.
Besides search, eBay will surely be benefited from Baidu’s many other verticals, in which I expect to see more at later stages.
Reason #2: eBay needs Chinese localized strategies
As a foreigner company in China, eBay absolutely needs a local power player like Baidu who understands the Chinese market. All these years, eBay’s many strategies in China are criticized as copycat versions of rivals Taobao and Alibaba and are often one step too slow.
Reason #3: eBay needs Baidu’s relationship network
Also with Baidu’s good relationships to other local Chinese companies and government, eBay will be able to easily avoid the hurdles that are very commonly encountered by foreigner companies in China.
Posted on November 18, 2006
Filed Under Baidu, China Internet, Ecommerce, PPC |
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5 Responses to “3 Reasons eBay China Partners Baidu”
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Great post!
eBay is finally playing the game. In the majority of markets eBay has been using the auction site of their eCommerce trinity to push their other products: payment and communication. But now in China they seem to finally use these as leverage to convert users to eBay. If you can control the online currency with PayPal, you’ll either make money from your competitors or you’ll own the market. Also with Skype and the market moving to pay per call they can basically “force” users to opt for eBay as an integrated market place.
As for Baidu, although there are no stats available on the migration of younger users to Google once they mature, it’s a good bet to target the future market on Baidu. As China’s ecommerce starts to boom over the next 5 years, it’s this younger user base on Baidu that will drive the growth, and that’s the market eBay wants.
Great insight Derrick!
[...] Further, Baidu’s partnership with Ebay will considerably benefit its market standing and improve the deployment of products and services, while adding more customers to the client base. eBay recently announced to partner Baidu in China. The agreement between Baidu and eBay China (eBay Eachnet) includes the three major areas below: [...]
I personally prefer Taobao. Ebay is usually the last store I check.
[...] Last month, eBay also announced its new partnership in China with Baidu, and I have analyzed the reasons why eBay needs Baidu. [...]