Baidu controls 91pc of mobile search market in China as smaller firms struggle to compete with nation’s top 3 internet giants: Barclays

A new survey of smartphone users in China has found the domestic market for mobile apps is dominated by the country’s three biggest internet companies – Alibaba, Tencent and Baidu – with smaller players struggling for share.

According to Barclays, top search engine Baidu, e-commerce king Alibaba and games and social titan Tencent “lead mobile penetration rates in their respective industry segments”.

Baidu had 91 per cent of the mobile search market, Alibaba’s Taobao owned 69 per cent in the e-commerce field and Tencent’s WeChat mobile messaging and networking app owned 88 per cent of its market.

The Barclays survey was of around 150 smartphone users in Shenzhen. The company notes that “the results may not adequately represent the mobile user base and could have some bias towards high-end users.” On a number of points, the findings followed those of similar research carried out by iResearch and Analysys. Users could select more than one app.

A measure of the most frequently used apps showed how WeChat has replaced previously dominant Sina Weibo as the most popular social networking tool for Chinese smartphone users, with 87.9 per cent saying it was one of their three most-used apps, compared to 29.3 per cent for the micro-blogging service.

Like Google outside of China, Baidu dominates mobile search, with the nearest competitor, Sogou, controlling only 7 per cent of the market.

Baidu was also the app of choice for mobile mapping, with 58 per cent of users saying it was their first choice, compared to 35 per cent for AutoNavi and 9.6 per cent for Google.

Google Maps, like all the US firm’s services, has been completely blocked in China since the beginning of this year.

Travel was one of the most competitive markets, the report found, with Ctrip and Baidu-backed Qunar controlling around a third of the market, or 39.5 per cent and 32.5 per cent, respectively. Domestic rival Elong was a distant third at 8.3 per cent.

That competition may not last long, however.

Ctrip recently attempted to buy Qunar and is already a majority shareholder in Elong, which posted losses of 356 million yuan (US$56 million) in the second quarter of this year.

Tencent, which owns 15 per cent of the company, proposed last month tobuy up all shares not owned by Ctrip, a move that analysts said would cement Ctrip’s lead in the space.

China’s online travel industry is expected to grow to more than US$75 billion in revenue by 2017, according to analysis firm iResearch.

Another valuable market, car-and-taxi-hailing apps, is also dominated by the ‘big three’. Didi Kuaidi, backed by both Alibaba and Tencent, controls more than 60 per cent of the sector, according to the Barclays survey.

US rival Uber, which has faced regulatory and other issues since investing US$1.5 billion in investing in its China expansion, controls almost 15 per cent of the market.

Previous estimates had found Didi Kuaidi to control more than 90 per cent of the taxi-booking segment, indicating that Uber is growing, particularly among private car-hailing customers.

There are more than 590 million smartphone users in China, according to official statistics.

 

Text: SCMP by James Graffiths 04-09-2015

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