Baidu buys stake in Uber in challenge to Alibaba, Tencent
Baidu is teaming up with Uber to take a crack at the country’s taxi-hailing market.
Chinese Internet giant Baidu Inc., operator of the largest search engine in the country, is teaming up with Uber to take a crack at the country’s taxi-hailing market.
Robin Li, Baidu’s billionaire chairman, announced today that his firm will buy a stake in Uber. Baidu will connect users of its map and search services to the taxi app, Li said.
Baidu didn’t disclose how big a stake it is taking, nor how much it is paying for the investment in Uber. Chinese state media China National Radio reported earlier that the investment is worth $ 600 million.
The pair is a latecomer to the market. Chinese e-commerce giant Alibaba Group and Internet company Tencent Holdings earlier this year spent billions of yuan to support the taxi-hailing app they back to secure user numbers.
Robin Li, Baidu’s billionaire chairman, presents a 3D-printed bike to Uber CEO Travis Kalanick as a gift. Baidu announced its strategic investment in the taxi app on Dec 17.
Didi Dache, the app that raised $ 700 million from investors including Tencent and Singaporean state investment firm Temasek earlier this month, has attracted 70% of the country’s estimated 154 million taxi app users. Alibaba-backed Kuaidi Dache has 50.2%, according to the government-run China Internet Network Information Center.
“The taxi-hailing sector is at an early stage of development. It is a promising industry,” Li said. “ Every Internet company wants to achieve something in this area. We will start by bringing a new experience to users.”
Uber currently operates in nine Chinese cities- Beijing, Shanghai, Tianjin,Chongqing,Shenzhen, Guangzhou,Wuhan,Chengdu and Hangzhou. Both Didi Dache and Kuaidi Dache operate in more than 300 Chinese cities.
Travis Kalanick, Uber’s chief executive officer, said the key to competing with rival apps is localising Uber’s services in China.
“Although it is winter in Beijing, for Uber, we are entering the spring for our business in China,” he said. “Our efforts in China are unique and more unique than anywhere else. You have to do things differently to succeed in China.”
Uber’s China expansion comes as the taxi app developer is facing a number of high-profile regulatory hurdles in other global markets. It is currently banned in India after allegations that a driver on service raped a woman. A Spanish judge also ordered a temporary halt to the company’s operation in the country.
Robin Li this year ranks No.2 on the Forbes China Rich List, with a net worth of 14. 7 billion.
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