21 February 2020

Baidu closer to realizing O2O ambition with Nuomi buy

Baidu is all set for a bruising battle in the O2O (online to offline) arena after acquiring the remaining stake in Nuomi (sticky rice in Chinese) from last week.

With its total ownership of the Groupon-like Nuomi, Baidu can now freely and fully integrate the website into its mapping and searching platforms to build a lifestyle offering.

Nuomi chief executive Liu Jun {劉駿 } said Baidu is optimistic about the prospects of lifestyle apps, adding that the search giant intends to establish a close-circuit O2O environment for users.

By weaving Nuomi into its system and taking advantage of its edge in mapping technology, Baidu looks determined to develop an all-round, location-based service to help users find nearby restaurants and shops, or the best discount deals.

The big three internet players—Baidu (BIDU.US), Alibaba and Tencent (00700.HK), known collectively as BAT—have found their own niches to compete in the O2O market.

Alibaba feels it has the upper hand with its Alipay and mobile Taobao e-commerce site. Tencent, on the other hand, gains advantage through its instant messaging application Weixin and Weixin Payment platform. Baidu’s ace is its location-based services.

As far as the mapping segment is concerned, Baidu is far ahead with 31.3 percent share of the market as of the third quarter of 2013, according to data from research institute Analysys International, while AutoNavi, which is 28 percent owned by Alibaba, corners 26.6 percent and Sogou Map has 8.5 percent.

Tencent trails with just 2 percent of the market, but it is not ready to give up without a fight. Last week, it agreed to pay 60 million yuan (US$9.9 million) to acquire Linktech Navi Technology. Navi owns independent intellectual property rights for 3S technology (GIS, GPS, RS), which could be the core element in combining mapping, software development and system integration into one and developing a service that could actively send information to users based on their location.

Tencent is now focused on its “street view” mapping technology, which is similar to Google’s 360-degree street view offering, and hopes to use this service to differentiate itself from rivals. Ma Bin {馬斌}, vice president of Tencent’s Mobile Internet Group, told that over 50 special camera-equipped vehicles are criss-crossing China to record the country’s street views.

Tencent’s street view map so far covers 116 cities, while work on 50 more cities is pending approval by the authorities. The cost related to the vehicles alone has reached 40 million yuan, Ma said.

Meanwhile, AutoNavi is working steadily in this field as well, so Tencent had better move faster if it wants to gain first-mover advantage.

– Contact the writer at [email protected]




EJ Insight writer