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.