Baidu aims to accelerate mini-programs with Youzan tie-up

2 min read
Baidu’s offices in Zhangjiang High Technology Park, Shanghai. (Image credit: TechNode/Shi Jiayi)

Baidu is allocating $30 million for a joint company with Youzan, one of China’s largest third-party providers of in-app retail services, as the search giant looks to accelerate the development of its mini-program ecosystem.

Why it matters: Mini-programs, lightweight alternative to apps, are fast becoming a key channel for merchants to engage with users. First introduced on Tencent’s WeChat, most of China’s tech players, including Alibaba and ByteDance, are aggressively exploring their potential.

  • The market for software-as-a-service (SaaS) vendors that help companies to set up and maintain mini-programs is also booming.
  • Monthly active users (MAU) of Baidu mini-programs hit 250 million in July this year, just one year after their introduction on its search app. In comparison, WeChat mini-programs boasted 400 million MAU as of April last year.
  • The number of WeChat mini-programs with more than 1 million MAU doubled year on year to 883, and those with more than 5 million increased by more than one-third to 180, according to a QuestMobile report covering the first half.

“We are open to a partnership covering various channels that could bring traffic or boost the next-stage growth for merchants on Youzan’s platform. Helping merchants to manage the mini-programs more efficiently and at a lower cost is the core motivation behind our cooperation with mini-program ecosystems on WeChat, Alipay, or Baidu.”

—Cui Yusong, CTO of Youzan

Details: The pair will inject funds into Qima, a non-wholly-owned unit of Youzan, the company said in a filing with the Hong Kong Stock Exchange on Thursday.

  • Upon completion, Youzan will hold a little over half of all Qima shares through an investment of $45 million.
  • Baidu will act as a minority shareholder through a combined investment of $30 million via two of its subsidiaries.
  • The pair will leverage Baidu’s platform to expand Youzan’s merchant base, according to the filing.

Context: Youzan went public in Hong Kong in April last year and now serves over 442,000 merchants from the retail, catering, beauty, education, and hospitality industries.

  • Baidu launched an RMB 1 billion (around $140 million) fund in December last year to help the development of mini-program startups and developers.
  • Tencent purchased more than one billion Youzan shares at HKD 0.53 each, which translates to a 7% stake in the SaaS vendor.