News to Baidu Will Invest $306M in Travel eCommerce Site Qunar

News to Baidu Will Invest $306M in Travel eCommerce Site Qunar-Baidu, China’s largest search engine has officially agreed to invest US $306 million for a majority stake in Qunar.com,an ecommerce solution and search engine for booking hotels,flights,trains,and package travel deals.
Baidu CEO Zhuang Chenchao revealed the heavy cash infusion will go towards Qunar’s new service development which includes mobile applications and a deeper concentration on hotel search services.Qunar will remain operating independently from Baidu and is still in consideration for an IPO, however the two companies will “cooperate in certain areas of online travel search” Baidu concluded in a statement.

Baidu sits in one of the world’s most lucrative and largest online markets for sheer user volume alone.The country boasts over a whopping 450 million users and is every ecommerce solution’s playground. While many sectors are still in their early stages of development,the potential for growth is huge.
Industry experts predict the online travel industry will be the next to take off in China in the near future as more and more consumers are beginning to use the web for their travel needs. The Qunar investment will give Baidu a stronghold in this specific market along with expanding its ecommerce efforts, as the company has been on a mission this year to do.

Baidu Chief Financial Officer Jennifer Li said: “Travel has long been one of the top categories on Baidu, and the number of travelers in China has been growing very rapidly, so this is a market of obvious strategic importance to us.” According to research firm iResearch, Qunar was rated as China’s number one travel site in March based on the number of unique visitors it receives daily, listing more than 11,000 air routes and 102,000 hotels worldwide.

However Baidu is not without its major competitors. China’s heaviest hitters also with leading ecommerce solutions in various sectors are companies like Tencent and Alibaba Group, both having Baidu set on their radars.

Tencent made an $84.4 million investment in Qunar rival and online travel company eLong in May, a company Expedia also holds a leading stake in. Meanwhile, Alibaba Group has been in development of its own search technology in order to compete directly with Baidu’s leading search engine. It seems the competition is encroaching on their territory but Baidu’s investments are just part of its master plan to aggressively expand further into the ecommerce sector.