Baidu's Walmart ties, Sina's e-payments
Sina's development of its own e-commerce services shows its talks for a Alibaba tie-up are dead, while Baidu's tie-up with Walmart's Yihaodian looks smart if the two sides work well together.
A couple of news bits in the crowded e-commerce space indicate that a previously rumored tie-up between leading portal Sina (Nasdaq: SINA) and e-commerce leader Alibaba is officially dead, while search leader Baidu (Nasdaq: BIDU) may have finally found a potent new partner in leading global retailer Walmart (NYSE: WMT). The two developments once again show how non e-commerce firms are all scrambling to get a piece of a market that could easily overtake traditional businesses like advertising and search to become China's most lucrative online sector.
These latest moves appear to show that Sina wants to develop e-commerce services by itself, rather than in partnership with a more established player. That's significant because late last year rumors emerged that Sina was talking with Alibaba about a partnership that would have seen the pair form a strategic partnership allowing Sina Weibo users to buy products on one of Alibaba's existing e-commerce platforms.
A Baidu executive said the two companies previously had a partnership in advertising, but that this new tie-up goes much further and will involve communication and planning at the top executive level. This kind of tie-up looks like an exploratory one that could easily result in close cooperation and even an equity investment if the two sides decide they can work well together.
Baidu's two previous e-commerce initiatives, including a joint venture with Japan's Rakuten (Tokyo: 4755), both failed after neither gained much traction in the highly competitive space. This new tie-up looks more interesting since Yihaodian is already a major player, and Baidu could potentially provide valuable new traffic through its popular search engine, including a recently launched e-commerce search site. All in all, I'd say this kind of tie-up looks like one of Baidu's better conceived plans to enter e-commerce, and could result in a profitable partnership for both itself and Yihaodian if the two sides find they work well together.
Bottom line: Sina's development of its own e-commerce services shows its talks for a Alibaba tie-up are dead, while Baidu's tie-up with Walmart's Yihaodian looks smart if the two sides work well together.