Baidu adjusts e-commerce: Youa may be integrated into Rakuten joint venture

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Regarding the news that Baidu Youa's general manager Li Mingyuan has resigned and is adjusting the business direction, industry analysts believe that this is only part of Baidu's comprehensive adjustment of its e-commerce business. In the future, it is expected that Baidu will further integrate Youa's business with the Lotte joint venture business.

Analysys International analyst Cao Fei believes Baidu should have entered the B2C market directly, rather than the C2C sector. This initial decision stemmed from a failure to accurately grasp the market's dynamics. He notes that after Baidu entered the C2C market, it discovered a surge in demand from large enterprises. While B2C models like Taobao Mall were experiencing rapid growth, Baidu's C2C business model remained sluggish, leaving it with a bleak outlook.

"By the time Baidu realized it should enter the B2C market, it was already too late. And after jointly investing in a B2C company with Japan's Rakuten, Youa became even more useless, and adjustments were inevitable," said Cao Fei.

Long before Li Mingyuan officially announced his resignation, Baidu insiders had disclosed that Robin Li should be extremely dissatisfied with the development of Youa, because according to monitoring data, Baidu Youa's traffic conversion purchasing power ratio was too low. Baidu Youa occupied more than 5% of traffic in the entire C2C market, but it only converted into less than 0.7% of market share. Li Mingyuan's departure was certain, and Baidu's future e-commerce focus would be on Rakuten.

Veteran internet analyst Hong Bo also believes that personnel and business adjustments at Baidu Youa are inevitable, but that it's a bit late to make them now. He noted that Baidu has established a B2C joint venture with Japan's Rakuten, and that Baidu Youa's business will conflict with that of the joint venture. Baidu must restructure its operations to ensure that the two businesses it is involved in do not clash.

What is the future direction of Baidu Youa? How will Baidu restructure its e-commerce presence?

Hong Bo believes that Baidu's future e-commerce focus will be on its joint venture with Rakuten. However, since Rakuten holds a controlling stake in the joint venture, Baidu will also consider its own platform. He predicts that Baidu Youa's product library and search engine will continue to operate.

Cao Fei believes that Baidu should shift its focus from C2C to B2C in the future. Given the difficulties in investing in and operating the Youa and Lotte joint venture platforms, Baidu should integrate Youa into the joint venture to leverage the advantages of combining search and B2C.

iResearch analyst Zhang Yanping previously told Sohu IT that Baidu Youa must make changes. She believes Baidu Youa's development has been slow, with only 5.9% users having purchased products through Youa, a significant gap compared to Taobao and Paipai. Facing strong competitors, Youa needs to make some changes.

"Baidu's search is too complex and not very targeted at a single industry. Baidu must find a way to maximize its search advantages and convert traffic into purchasing power, otherwise its development in the e-commerce market will continue to stagnate," analysts believe.

Last week, Sohu IT reported that Baidu Youa is adjusting its business direction, shifting away from its original focus on a C2C platform. The company is strengthening its relationship with search engines by launching new products, thereby increasing traffic monetization and profitability. (Lei Feng)