Chinese search engine Baidu is shutting down Youa, its e-commerce subsidiary, giving existing merchants have one month to migrate to either Rakuten China or Yaodian 100.
WSJ reports that Baidu is believed to be secretly building a new e-commerce platform which will better leverage its search engine technology, but the paper revealed no further details.
The shutdown will take effect in May and Youa’s existing merchants will be migrated to Rakuten China and Yaodian100, Baidu said in a statement.
“This should not be seen as Baidu withdrawing from the e-commerce scene. In fact, we are in research and development on a new e-commerce platform product which will suit users better,” a Baidu spokeswoman said.
The closure of Youa, which Baidu had set up to rival Alibaba’s popular online shopping site, Taobao, cements Taobao’s position as the leading e-commerce player in China.
Youa failed to gain traction with the majority of online users who preferred to use Taobao to buy and sell goods online. Based on gross merchandise value, Taobao commands more than 70 percent of China’s e-commerce market.
China is the world’s largest internet market with more than 450 million users.
Web commerce in China has surged in recent years as buyers in the world’s second-biggest economy switch to the internet for better deals from more reliable suppliers and reasonable price.
Rakuten China is a joint venture between Baidu and Japan’s largest online retailer, Rakuten Inc.
