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Baidu: What the crisis of Baidu means for companies

After years of success Baidu is now in serious trouble. The main culprits are Wechat and the Walled Gardens, which hide search results.

Like Google, the Chinese search engine Baidu earns the most money through paid ads. After many years of spurting profits, the company is facing major problems. Sales stagnated in 2019 compared to previous years at 26.3 billion yuan (3.3 billion euros), the share price has plummeted since the beginning of the year by more than 60 percent.

Baidu sees itself under pressure from powerful competitors such as Alibaba and Wechat. Because their contents are hidden behind so-called walled gardens. For Baidu there are hardly any possibilities to find this content. Internet users are increasingly using their own search masks to display content. When changing from desktop to mobile Internet, new players are constantly appearing, such as Tiktok. Its parent company, Bytedance, announced now the start of its own search engine .

Baidu or Wechat: who makes the race?

With more than a billion active users, Wechat is now the most important marketing channel for companies and a serious competitor to Baidu – on the one hand through its internal search engine, and on the other hand through the ability for companies to advertise.

If you want to successfully approach Chinese customers, you should not settle for setting up an official Wechat account, but also look after viral marketing – for example, through cooperation with influencers or Wechat advertising.

If you want to appeal to younger target groups, you should focus more on current trends such as Short Video. For example, while Tiktok is still skeptical in Europe , the platform in China is increasingly targeting younger and middle-aged groups as well. Companies can now also switch to Tiktok and link to their website or Tmall account from there.

Baidu ecosystem still plays an important role

A classic focus on Baidu with a mix of search engine optimization and advertising should not be completely thrown overboard. Over the past two decades, Baidu has created a complete ecosystem of platforms that are still important to businesses: due to the fact that the Chinese version of Wikipedia is locked in mainland China, Baidu Baike remains there at 16.3 Million articles the online encyclopedia number one.

Companies should also seek a substantiated entry there . The hurdles are higher than Wikipedia. Foreign business owners must provide Baidu with documents that provide information about their company, such as the commercial register entry or the business registration. Baidu Zhidao is another platform of interest to foreign companies. Users give themselves here, similar to Quora, advice and answer each other questions. While Baidu Zhidao continues to play an important role for many Internet users, alternative offerings such as the app Zhihu are increasingly gaining in importance.

The Baidu Tieba bulletin board platform, which has been an important channel for small and medium-sized companies for years to measure user sentiment, has clearly lost significance in recent years. For foreign companies, getting started is less and less worthwhile.

Advertisements on Baidu: Are the high costs worthwhile?

The equivalent of Google Ads is called in China Baidu Tuiguang (百度 推广 官方 网站). Just like the big US competitor, there’s the ability to serve ads through both the search and display networks.

The Search Network shows ads above, to the right, and below the organic search results. To ensure that only potentially interested users see certain ads, Baidu analyzes user behavior and categorizes site visitors by age, gender, region, hobbies, and other attributes.

However, as with the publication of articles on Baidu Baike, the cost of delivering ads is not to be underestimated. It may take months to successfully open an account. In addition, the budgets necessary to achieve corresponding ranges are comparatively high. Companies should analyze on a case-by-case basis whether the cost of Baidu advertising is worthwhile or whether it makes no sense to focus more on other marketing activities such as Wechat advertising.

For German companies in China, Baidu will continue to play an important role in the online marketing mix in the future: entries on Baidu Maps and Baidu Baike are a fundamental prerequisite for all types of companies to be seen.

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