Youa, the ecommerce subsidiary of Baidu announced today raising US dollars tens of millions from IDC-Accel and Qiming Venture Partners and spinning off from Baidu as an independent company, a move which is part of a broader and growing effort of the Chinese search giant to venture into the heated Chinese ecommerce market, again.
Founded in Oct. 2008 by Baidu, Youa started as a direct competitor to Taobao, the de facto Chinese ecommerce ruler. However, the service didn’t fare quite well in the intensely competitive market, Baidu discontinued Youa’s service as a C2C platform, pivoting the service into a life service platform in this April with a new tagline of “finding anything you need in everyday life”.
Cai Hu, the general manager of Baidu Ecommerce Division who took the realm as Youa’s new Chief Executive said that “We’re turning over a new page for Youa, which will be committed to build a comprehensive platform centered on life service and local merchants.”
Youa’s transformation in this April spoke to Baidu’s failed attempt in competing with Alibaba/Taobao in the forefront of business, as of now Taobao took over north of 71.7% of China’s ecommerce market. According to a market research conducted by the Boston Consulting Group, China’s online retailing market would overtake the U.S. in 2015 to become the No.1 with a market size of over US$ 314 billion, a market no big players could afford to ignore.