Boston, MA 03/07/2014 (wallstreetpr) – The Chinese ecommerce industry is growing by leaps and bounds and its growth rate is expected to outpace the U.S.’s growth rate by almost six times in the coming days. Baidu Inc (ADR) (NASDAQ:BIDU) is already a leader in search engines but is also ramping up its presence in the ecommerce sector.
The e-commerce revolution:
Baidu Inc (ADR) (NASDAQ:BIDU) already accounts for a majority of search engine queries in China. The e-commerce industry is growing at a very fast pace in China as youngsters are flocking to e-commerce portals to complete their purchases. Rise in disposable incomes, ease of purchase as well as paucity of time are among the main reasons for the surge. One of the hidden reasons is also the resurgence in sales of smartphones. It is estimated that mobile phone internet users increased by 19% last year to reach 500 million. Smartphones are increasingly changing the trend in shopping across the globe and this trend is also visible in China. It is estimated that the annual growth rate of online commerce is 60% in China as compared to 1% in the U.S.
Baidu’s acquisitions:
Baidu Inc (ADR) (NASDAQ:BIDU) already accounts for almost four-fifths of all search engine queries in China as per the latest data for the fourth quarter. It is investing very heavily into apps for search services and mapping to take on competition from other companies. It is also taking the acquisition route very aggressively to bring about inorganic growth and also increase its share in the ecommerce segment. Baidu acquired a 59% stake in Nuomi Holding Inc, a e-commerce service provider, for $160 million in August. It also acquired 90 Wireless Websoft Ltd., one of the most popular third party stores for smartphone applications for $1.85 billion. It is also scouting for more acquisitions in the ecommerce segment though it is not very forthcoming about this.
Investors of Baidu Inc (ADR) (NASDAQ:BIDU) are hoping for some more bits of good information from the company.
