Baidu follows Tencent’s lead in building ‘super app’ ecosystem with new service

The initiative accelerates advances made by China’s major internet companies in building platforms that can host multiple services

 

 

Baidu chairman and chief executive Robin Li Yanhong is taking a page out of fellow tech billionaire Pony Ma Huateng’s playbook, by pushing to introduce mini-programs, which have helped Ma’s Tencent Holdings surpass 1 billion users and boost engagement time.

 

But Li could not resist taking a dig at the competition – “We design to enrich people’s lives, not to help them kill time”.

 

Nasdaq-listed Baidu, China’s largest search engine operator, is “gaining share”, compared to most “super apps”, according to Li in a conference call with analysts on Wednesday after the company posted quarterly profit that topped analyst estimates.

 

Baidu’s super app initiative further accelerates advances made by China’s major internet companies to build platforms that can host multiple services, delivering greater convenience to consumers in the world’s largest smartphone market.

 

Mini-programs refer to applications typically smaller than 10 megabytes that can run instantly on the main app’s interface. These offer speed of access to users because a program does not have to be downloaded from an app store, but simply run from within the app.

 

Shenzhen-based Tencent already offers more than one million mini-programs on its WeChat service, which has become China’s ubiquitous, do-everything platform for messaging, social networking, e-commerce and mobile payments that has more than 1 billion users globally. WeChat introduced a simple platform-jumping game in late December that garnered 100 million users in two weeks and inspired a raft of copycats.

 

“Over time, this will be a long-term battle in building an ecosystem,” said Raymond Feng, a senior analyst and co-director of research operation at Pacific Epoch. He said efforts to leverage Baidu’s search app by building a universe around was reminiscent of the ecosystem development at WeChat.

 

Tencent opened its mini-program platform to outside developers in April, giving them 30 to 50 per cent share of revenue generated from advertisements.

 

Beijing-based Baidu company first announced the launch of mini-programs at its artificial intelligence developer conference last month. Its app, which offers search, personalised news feed and now mini-programs, reached 148 million daily active users in June, up 17 per cent from same period last year. A full roll-out is expected by the end of this year.

 

Li said the initial response from partners has been “overwhelming”, following the release of mobile gaming and travel-related mini-programs.

 

With a population of 1.4 billion people, China is also home to 772 million internet users, the biggest online community in the world, according to the China Internet Report co-authored by the South China Morning Post, its tech news site Abacus and the San Francisco-based venture capital firm 500 Startups.

 

Alibaba Group Holding, the parent company of the Post, and Facebook have also been driving mini-program initiatives with their products.

 

Still, Pacific Epoch’s Feng said Baidu’s pursuit of a super-app represented how its personal computer and mobile search business has become mature. “That is why Baidu has been investing in content generation and multiple platforms to retain users,” he said.

 

One of those platforms is DuerOS, an AI operating system designed by Baidu to support voice- activated interactions. This system has been installed in 90 million devices as of the end of June and has processed more than 400 million voice queries for that month alone, according to Baidu.

 

In a separate initiative, Baidu said the first 100 of its fully autonomous buses, co-developed with King Long United Automotive Industry, rolled off production line last month.

 

Despite “tremendous adoption and strong interest”, it will take some time before DuerOS and Apollo, Baidu’s self-driving car system, will contribute to the company profits, Li said.