Baidu Inc (ADR)(NASDAQ:BIDU), China’s Search engine giant, has launched the mobile wallet service after the segment has surged impressively with approximately $1.6 trillion transactions made, in 2013. Alibaba and Tencent are already in the field with Baidu being the newest entrant.
Baidu’s Vice President LiMingyuan said, “We saw that developers/partners have needs in retaining users and payment services, which is why we launched Baidu Wallet.”
Baidu planning additional products
Services offered by Baidu Inc (ADR)(NASDAQ:BIDU) would be similar to that of other companies. The Chinese search engine giant is already providing interbank transfer for free, allowing the users to pay online for the purchases and utility bills with the help of its Baifubao third party payment app.
Additionally, the company is making efforts to link money management products at 8.baidu.com with Baidu wallet, in the future. Through the service, business and developers will be at ease while connecting with the consumers and online users from Baidu. For the first 10,000 businesses, the company would offer the lowest fee compared to the whole industry.
In an effort to promote Baidu Wallet, the company will shell out CNY1 billion or $160.8 million in giving cash discounts to the users once they use its app to make payments. Further, the company will offer discounts to the users who use Baidu services to buy music services.
Big rivals hold major market share
Baidu Inc (ADR)(NASDAQ:BIDU) has been a late entrant in the game for which it will have to compromise with the market shares initially. Alibaba’s service Alipay is already holding strong traction in China mobile payment industry, and last year garnered around 50% market share in China e-payment market. Also, the company stated that around 25,000 Alipay mobile transactions hit every minute, which totals to the daily transaction of more than CNY 20 billion.
Tencent, on the other hand, is also taking chunk of the share in mobile payment market due to its integration with popular messaging services WeChat since August last year.
Baidu Inc (ADR)(NASDAQ:BIDU) shares surged almost two times since last year due to increased penetration of internet in the Chinese market. Baidu has a market capitalization of $54 billion and the company paid $1.9 billion in July for 91 Wireless, which was an app store given for mobile users to enhance their experience.