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Organization, Strategy, Little Find

3 October 2017

Little Find

Baidu: securing the present, preparing for the future

How has Baidu, in the space of just 15 years, transformed from an outsider among Chinese search engines into one of the digital world’s principle players, with $10 billion in profits? The answer is a growth strategy based on a constantly repositioning business model as well as breakthrough innovations to prepare for the growth of tomorrow.

In 1996, Robin Li filed a patent in the United States to facilitate the indexing of web pages. His technology enabled the evaluation of the relevance of sites based on the number of links to them. Beat to the punch by Sergey Brin and Larry Page, who were inspired by his solution to found Google in 1998, Robin Li nevertheless managed to raise a million dollars and in 2000 he headed to Beijing to create Baidu. Aided by protectionist government policy, the Chinese search engine met with almost immediate success. Today, it is one of the fourth highest traffic sites in the world. “Our success is mainly due to a cleverly orchestrated growth strategy. We have always sought to secure our historical business model while preparing for the future,” says Chen Ma, strategy manager.

Patience: gradually adapting their business model

For over 15 years, Baidu’s story has been marked by small changes that allowed them to progressively reinforce their dominant position in the search engine market. “When Robin Lin created Baidu in 2000, he was happy to offer his white label solution to other well-established web portals. It was only a year later that he launched the search engine to the general public with a system of sponsored links,” Chen Ma explains. In 2005, the site launched in Japan and South Korea. The last major milestone in Baidu’s development dates back to 2011, when the company partnered with Microsoft to have English keywords entered into the Chinese search engine deliver results from Bing. “The value proposition of our historical business model has rested on our capacity to index pages composed of ideograms. Our search engines have been entirely developed around this thinking. For other alphabets, we prefer to rely on the expertise of others.”

Listening: meeting the changing needs of customers

Since the beginning of the 2010s, the Chinese financial sector has been in a state of flux. To help offset the country’s economic downturn, the government has been gradually allowing private players to enter the banking world. “In recent years, individuals and small businesses have struggled to find financing solutions with the state banks. By launching ourselves within this market, we think we can help our users to more easily realize their projects”. And thanks to the masses of data that Baidu collects, the company is well-positioned to offer ultra-personalized services to customers. “For example, after observing that many Chinese people research holidays in France in the spring, we are not only able to negotiate rates with travel agencies, but also to help customers find credit solutions to finance their vacations”, explains Chen Ma. The Bank of Baidu, Baixin, was greenlit by the Chinese regulator in January 2017. Following an agreement with Citic public bank, it will offer financial services online, but will also operate as an agency that utilizes the physical locations of the state bank across China.

Tagged with: Prospective, adaptation, transformation, Dual Transformation, uncertainty, Baidu, opportunity, change, agility, performance, strategy

Published by Mehdi Ramdani