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Chinese Search Giant Baidu Launches Groupon-like Site

China's top search engine Baidu has launched its own Groupon-like platform that will not only provide discounts to consumers, but will also allow businesses to freely promote their own group buying deals online.

Baidu launched a beta version of its group buying site on Wednesday, as part of its Youa e-commerce information platform. In Chinese, the site is currently called Youa Tuangou, which means "group buy".

The Chinese company is also letting merchants set up their own discounted deals through its Baidu Shenbian website, which provides consumer reviews on restaurants, hotels and other places to shop for goods or services. Those deals will then be promoted on the site and through Youa Tuangou, said company spokesman Kaiser Kuo.

"Any merchant on Shenbian can set up a group shopping deal. We give them the tools," Kuo said. "This is going to be a very important feature for us on Youa."

The launch of the services come as the U.S. based Groupon has been making headlines. Google, Baidu's biggest rival in China, is reportedly in talks to acquire the group buying site. At the same time, Groupon has made a move into Asia by buying three websites in the region, two of which serve Hong Kong and Taiwan. The company, however, has yet to expand into mainland China.

Baidu's new platform is still small, with only three deals so far offered for the Beijing area. But its approach is similar to a new service Groupon is launching this week. The U.S. company is now allowing businesses to create their own deals through Groupon Stores due to the high demand from merchants wanting to be featured on its sites. Through the service, businesses can offer as many discounts as they want, rather than be forced to wait several months before being featured as a deal of the day on Groupon.

The concept of group buying already had roots in China, where customers often haggle over prices with merchants. One Internet site to grab this trend in China was TeamBuy.com.cn, which started in 2006. Users wanting to get a good deal on the same product could connect with each other and schedule a time and place to go and collectively bargain for a discount at the store. TeamBuy now has more than 3 million registered members and operates in 150 locations.

But it took a U.S. site like Groupon to fully realize the concept's Internet potential, streamlining it into a more user-friendly model, where consumers can bargain for good deals virtually.

In January 2010, China's first Groupon-like site was launched. Now the country has more than 1,200, according to the China e-Business Research Center.

The market for such sites is projected to reach 980 million yuan (US$ 147.6 million) by the end of this year, according to Beijing-based research firm Analysys International. But it's expected to grow annually by an average of 57 percent over the next three years.

Baidu is China's largest search engine, with a 73 percent market share, according to Analysys. Google holds a 21.5 percent share.

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