Daily Digital Pulse of China: China Ecommerce, China PPC
Taobao Does Not Seem to be the Seller’s Paradise it once was
It seems like competition in Taobao is becoming unbearable for some sellers. According to a study carried by an economic observer 57% of sellers using Taobao admit that competition in the e-commerce platform has become “more intense.” While 29% of Taobao sellers have described competition in Taobao as simply “too intense.” This increase in competition is significantly due to the increasing number of sellers found on the platform. As revealed by the study, 60% of sellers in Taobao have been present in the platform for 2 years or less. With this increasing number of sellers in Taobao, fierce price competition has formed. In order to distinguish themselves to buyers, sellers have been obligated to promote endless promotions and discounts, which evidently makes their profitability very low. Thus, 44% of sellers on Taobao consider that it is hard to say whether Taobao is still a paradise for entrepreneurs.
Source: IT Feed
JD Boosts its Online Presence
JD.com is expanding the number of services it offers in order to attract more companies to its open platform. JD, despite being one of the leading B2C retailers in China, with an annual turnover of $9 billion, it is not complacent - JD sees constant renewal as its top priority. The company plans to make it easier for third parties to set up flagship online stores by upgrading its existing IT systems. However, JD is not the only one to set up an open platform. Alibaba’s Tmall launched a similar platform in 2008, as did Amazon in 2009. Analysts see JD’s renewal strategy as part of a wider trend – online marketplace sites are increasingly moving towards open platforms, with the aim of becoming “e-commerce total solution providers”. Nevertheless, JD remains the underdog – the company accounted for only 17% of e-commerce transactions in Q1 2013. Tmall, by contrast, accounted for 48% of market transactions.
Source: China Daily
Baidu to Increase the Cost of PPC advertising for some account holders
Starting August 1st, Baidu will increase the price of both unverified PPC accounts and accounts that have only one star credibility. While for unverified business or personal accounts promotion cost will increase from an additional 10% to 20%, for verified accounts that have only one star credibility promotion cost will increase 5%. Thus, in case one’s account is unverified or only has one star credibility, one can contact his Baidu account manager in order to fulfill a certification and credibility level increase. While the verification process requires advertisers to submit several business documents, pre-qualified authenticated accounts can apply for verification. All verified accounts will have a “V” next to their name been displayed to search users. In affect we will likely see an altering of the way PPC accounts and ads are being used on the Baidu platform.
Source: China Internet Watch
Sogou Q2 Revenue Up 64%
Sogou’s revenue increased by 64% in the second quarter of this year, to $50 million. Sogou gives two reasons for the large increase in revenue. Firstly, it has only recently implemented the first step in its medium-term business strategy. Secondly, the number of users buying Sogou products has been unexpectedly higher than expected. Although this search engine platform is the company’s main focus, Sogou also has series of desktop products. Sogou Input makes use of advanced search engine techniques - the analysis and categorization of the most popular words or phrases on the Internet. Sogou Explorer offers menu bar searching, text selection searching and other seamless ways to embed the search engine of Sogou. The company, which was rumoured to be in merger negotiations with Qihoo earlier this month, now has over 150 million active users and is seen as a small, yet innovative competitor to search engine giant Baidu – which accounts for 90% of Internet searches in Mainland China.