Baidu and eBay China Partner Up
Under terms of the agreement, Baidu will promote PayPal Beibao, PayPal’s service in China, as the preferred payment method on Baidu. In return, eBay EachNet will use Baidu as the exclusive search provider on eBay EachNet.
The two companies also plan to develop a co-branded toolbar. They expect to test text-based search advertising on eBay EachNet in the first quarter, and plan to implement it by the second quarter.
This seems like a smart move from both eBay and Baidu. China’s market share has been declining since Taobao in 2003 entered the market. According to a study from the China Internet Network Information Center (CNNIC) in May 2006 Taobao has cornered 2/3 of the market.
Taobao is part of Alibaba, the leading online business-to-business platform and also the company in control of Yahoo’s operations in China. It also owns the competing online payment system Alipay that is/was more tailored to the Chinese reality as credit cards are not yet widespread and trust in online payments is low.
Making Paypal Beibao the preferred payment method on Baidu will benefit eBay China. Baidu gets a major new distribution channel for its ads and more international street credibility.
Recently there were rumors that eBay China would leave the country or sell its China business and this partnership will probably put a stop to these.
Gemme van Hasselt is an Internet Marketing Consultant, living in Shanghai, China. His musings on life can be found on China Snippets