Thursday, April 30, 2009

Credit Suisse repeats, third year running, that Baidu will lose market share

Credit Suisse analyst Wallace Cheung says Baidu's
dominance will start to slip in the next few years,
at the hands of Google and e-commerce site Taobao.
In a report issued today, Cheung says Baidu’s share
will drop from 59 percent in 2008 to 55 percent in
2009 and 51 percent in 2010. Meanwhile Google’s
share increases from 23 percent in 2008 to
33 percent, and Taobao’s share runs from 1 percent
to 11 percent. Cheung offers a couple reasons for the
changes in market share, which is after the jump.
Google will gain share from higher growth in search
traffic as it optimizes its service in China, forms
partnerships, and builds its salesforce, which is largely
seen as the best in the business. In addition, Google is
launching search products for music, mobile, and maps
this year.

Online shopping site Taobao should gain share because
Cheung points out that most Chinese don’t use search
engines as their primary shopping source. In fact,
44 percent of respondents in a survey performed by
Credit Suisse said they used Taobao rather than a search
engine for their shopping needs. Only 22 percent said
they used Baidu. Over the next few years Cheung believes
this will grow as Taobao bolsters its offerings.

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