Baidu, China’s No. 1 search engine, will invest over 20 billion yuan (US$3.2 billion) in its Baidu Nuomi group-buying platform, it said on Tuesday. The investment will be spread over three years to expand Nuomi’s online-to-offline (O2O) platform under a strategy called “Membership Plus”, CEO Robin Li said. O2O e-commerce turns online services into offline business opportunities. According to Baidu, the strategy aims to help merchants build their own marketing platforms to attract consumers. Nuomi’s membership system will be integrated with the merchants’ point-of-sale systems, allowing users to pay for goods with prepaid cards linked to the app. Users who spend a certain amount can enjoy discounts from both Nuomi and merchants in their capacity as VIP customers, the company said. “I took a look yesterday, and right now Baidu has over 50 billion renminbi in cash on its books,” said Li, using China's official name for its “people’s” currency. “We’re going to take 20 billion of that, and do Nuomi right,” he added. “Going from connecting people with information to connecting people with services is a major transition,” he said. Nuomi operates in over 330 Chinese cities but aims to cover all urban centres in the country by the end of the year. It has 650,000 online stores, with a monthly turnover of nearly 2 billion yuan. Baidu is not the only tech giant in China which aims to expand into the O2O industry. Rival Tencent spent US$736 million in June 2014 to buy a 19.9 per cent share in Chinese online classifieds site 58.com. It added to its investment later that year by snapping up more shares . WeChat, Tencent’s mobile messaging app, also allows users to order food, shop online and book taxis. The app enjoys unparalleled popularity on the Chinese mainland but not in Hong Kong, where locals are concerned about its data-protection policies. Internet consultancy iResearch expects China’s O2O market will grow by a third this year to 309 billion yuan, according to a report by Barclays this month.