Baidu in 2013, Needs Entry-Level Product to Access Mobile Internet Market

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Baidu, failed twice for its major attempts towards mobile internet market, including Baidu Yi and Leho, an online portal and community focusing on lifestyle information and service. On one hand, Baidu cooperated with design houses including Changhong and Dell to launch the strategic product Baidu Yi. However, it turned out that there was little opportunity for deep customized Android OS and Baidu had to subsidy the design houses in the end. On the other hand, Baidu has been developing both apps and online community for Leho, but the results were not that good as expected from both approaches.

The competition has started, and it’s tough. Compared to WeChat (Wexin) for Tencent, Alipay and Tmall for Taobao, there is not successful platform level product for Baidu besides Baidu map. Despite that it is a bit late, Robin Li, the man driving this giant, finally made his mind to push Baidu to the mobile internet market.

According Chinese media, in 2013 Baidu will spend more efforts on mobile application, including its mobile browser, mobile search, mobile input method, and Baidu Application Center. The key part in Baidu’s strategic plan lies in the mobile cloud. Once the user information is stored in the cloud, the switching cost will increase if users plan to move to other platforms. Google surely is doing great on this strategy.

Robin Li laid out the four core businesses of the company during the annual meeting, including traditional search, mobile cloud, LBS and internationalization strategy. Baidu Map is probably the most popular app developed by Baidu. It offers online/offline map, free navigation and even indoor maps, and it also links with LBS service which can help users find POI nearby. On the mobile cloud side, Baidu even came into this market later than Sina which the first domestic player launched the mobile cloud product, followed by Tencent, Alibaba, and Shanda. Baidu is late for mobile cloud.

The challenge Baidu faced is in lack of platform-level product for the mobile internet market. Besides the Baidu Map which has the potentials, the chance to find alternative entrances for Baidu might also exist in the area of security, browser, video and music etc. Note that the strength of Baidu is definitely not in social networking service as unfortunately it hasn’t created any social networking product successfully so far.

Both Alibaba and Tencent are encouraging internal competition within the company. Compared to the competitors, the corporate culture of Baidu is much more moderate. Robin wants the Change. In November 2012, Robin Li sent out an open letter to all the employees, which pointed out that Baidu was in lack of the so-called Wolf Culture, and the life in Baidu was too comfortable. It was considered as the primary problem for Baidu’s reformation, but it seems still unsettled after a few months.