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Baidu Expanded into Brazil: Why It’s a Great Decision & What it Means for the Future

Last month Baidu, the dominant search engine in China, announced they launched a Portuguese version of their search engine in Brazil. (You might notice they have opted for a subdomain on their .COM, instead of the .COM.BR Brazilian TLD that Google uses, but that’s for another post.)

Brazil might seem like an odd first expansion choice for a search engine that is primarily focused on the Chinese language, but when you dig into the details, it actually quite logical.

Baidu Campus Baidu Expanded into Brazil: Why Its a Great Decision & What it Means for the Future

Baidu’s Background

For those unfamiliar with Baidu, their algorithm is similar to other search engines in that it calculates a web document’s relevance to a query by using a set of on-page and off-page factors. However, the quality of results is not the same as you might see on Google.

The reason for the lower quality is that Baidu’s algorithm gives far more weight to easy to game factors like keyword density and low quality links, whereas Google is a bit more sophisticated in determining relevancy. Additionally, Baidu has a much smaller index due to their weaker crawling capabilities.  As a result, anyone optimizing for Baidu knows that submitting a sitemap to Baidu’s Webmaster Tools is critical to facilitate efficient discovery of their site.

Some of the weakness in the algorithm could be explained by a lack of competition, which meant Baidu had little motivation to innovate and constantly improve search quality. Google’s departure from China in 2010 was quite beneficial for Baidu, and for a couple of years they easily dominated the search market in China.

Baidu’s Challenge

Everything changed for Baidu in 2012 when Qihoo 360,  a software company known for antivirus software, launched it’s own search engine so.com. Surprising many in the Chinese search world, Qihoo quickly zoomed to a 10 percent market share in their first year of business.

Qihoo is currently the second largest search engine in China with 23 percent of the market. Additionally, Baidu competes against Sogou.com a company that just recently merged their search engine with Tencent’s Soso search engine. The combined Sogou market share is 11 percent.

The new competition has steadily driven Baidu’s market share lower over the last two years.  While Baidu is still the market leader, they now have just 63 percent market share compared to their 72 percent at the end of 2012.

With their market share taking a beating in its domestic market, it makes a lot of sense that Baidu decided to find some growth in what they perceived to be low hanging fruit outside of China.

Why Brazil?

While to some it might seem like a fool’s journey to enter the Brazilian market, where Google currently has a 98 percent market share, there actually are a number of reasons why Brazil is the perfect choice for Baidu’s foray into new markets.

  1. Brazil still has relatively low Internet penetration at only 46 percent, so Baidu’s challenge is less about converting Google users to Baidu users than it is about getting new internet users to start using Baidu. This is the precise challenge that Baidu faces in China where only 42 percent of people are online.
  2. Just like China, Brazil is also a member of the “BRIC” (Brazil, Russia, India, China) nations, which are countries deemed to be at similar stages of economic development. If Baidu had to choose one country to enter, it would make sense to choose a country that has very similar economic characteristics. Furthermore, out of the other three countries on the BRIC list, Brazil is the only country where Baidu has a chance of competing. Yandex, the Russian homegrown search engine, dominates the Russian search and, as I recently wrote, even Google faces numerous challenges at knocking Yandex out of the top spot. In India, a significant amount of search queries are conducted in English, and Baidu is unlikely to beat Google in the English language search for the near future.
  3. Aside from economic growth there are other similarities between the two countries such as a large growing middle class and a highly educated workforce. It is logical that Baidu would consider opening a local office with a staff that has a similar makeup to employees in corporate headquarters in Beijing.
  4. Baidu is a strong mobile company, and their mobile users even outnumber their PC customers. Brazil is on pace to become a mobile first country, if its current mobile connection rates continue, and Baidu might see this as a competitive advantage.

Time will tell if entering Brazil was a wise decision for Baidu, but the real significance behind this expansion is that it shows that Baidu is starting to think and act global. They have already announced that Thai and Arabic are next, and they surely have thoughts on where to go afterwards.

Should Google be worried that they will enter the US market? Probably not right now.

The Baidu algorithm isn’t ready yet for that level of competition, but the recent hire of a deep learning expert from Google could mean that Baidu has every intention on improving quickly. One thing is certain; the next few years will be very interesting in the search market.

 

Image Credits

Featured Image: Wikipedia
Post Image: Wikipedia

Eli headshot Baidu Expanded into Brazil: Why Its a Great Decision & What it Means for the Future

Eli Schwartz

Online Marketing Manager at SurveyMonkey
Eli Schwartz is the Online Marketing Manager for SurveyMonkey, the world's largest online survey company. He oversees all SEO efforts and strategies on SurveyMonkey properties across 17 languages. SurveyMonkey serves over 20 million customers worldwide, including 99% of the Fortune 500, and collects over 2 million online survey responses daily.The Company sits squarely at the intersection of several key technology trends including cloud-based software-as-a-service, data analytics and the consumerization of enterprise software.Prior to SurveyMonkey, Eli was the Director of Search and Social Media at High Gear Media, an online content startup where he managed SEO, Social Media, and Paid Marketing.
Eli headshot Baidu Expanded into Brazil: Why Its a Great Decision & What it Means for the Future

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6 thoughts on “Baidu Expanded into Brazil: Why It’s a Great Decision & What it Means for the Future

  1. Great article Eli and I also can actually see why they, Baidu, would venture to Brazil. As they grow however, as you eluded to, they will have to improve many things – their algo and crawler are just two and too slow. This also makes me question their capabilities to do anything in the mobile market presence.
    Its funny that in lands known for being technology giants of solid state, semi-conductors, ceramics, and other sophistocated technologic feets of engineering that Baidu, 360, and others of the area are so far behinde.

  2. Hi Eli,
    I just wanted to make a few comments on your article. Firstly, Brazil was not in fact Baidu’s first attempt across international borders. It was in fact Japan, which resulted in an astronomical fail. Secondly, currently Google has 98% of Brazil’s martetshare and in order for Baidu to do well in this economy which is already dominated by Google it is going to have to find different ways to differentiate itself from its competitors. I don’t think their plan is enough. I do however think that Baidu should stick with the plans set out by Jennifer Li, the CFO who believes that Baidu’s best plan of action is to target developing countries which have little to know internet accessibility and provide infrastructure there and become the dominating presence off the bat.