China's Baidu Extracts E-commerce From Youa in Overhaul

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China's largest search engine Baidu is shaking up its e-commerce services, migrating all of the merchants from its Youa platform to its other Chinese e-commerce partner sites.

Baidu Youa, launched in 2008, has been the company's effort to combine its search engine service with e-commerce. Part of the site operates as an online retail business, allowing users to buy a range of different products.

But even as Baidu has 75.5 percent of China's search engine market, the company's Youa site has not taken a major share of the country's e-commerce market, according to Beijing-based research firm Analysys International. Baidu Youa only has 0.1 percent share of the online retail market, with Chinese e-commerce giant Alibaba Group's Taobao site sits firmly in the lead with a 73.8 percent share.

Baidu is transferring the merchants to its new e-commerce site at Rakuten China, a joint venture between the search giant and Japanese Internet company Rakuten that launched in October. Merchants will also be moved to the Chinese e-commerce site, which Baidu has invested in.

Baidu believes that Youa's existing merchants will be better served by migrating to the two sites, said company spokeswoman Betty Tian. Rakuten is designed to be a comprehensive shopping mall, while mainly focuses on selling womens' products.

Baidu Youa, however, will still operate. The site already works as a lifestyle portal, offering users information on restaurants, karaoke venues and even where to take wedding photos.

The company says its Youa team is also developing a new platform combining both search and e-commerce elements. But Baidu declined to comment how the new platform would operate and when it would launch.

"We are still going to have a strong presence in e-commerce," Tian said. "We don't intend to retreat at all."

Cao Junbo, chief analyst at iResearch, said Baidu Youa did not have more success in the online retail market partly because it was launched fairly late. Alibaba's Taobao site was launched five years earlier.

"Even with Baidu's investment in this area, it would have been very hard for them to see a major return," Cao said.

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