Baidu plans $3.2B for online-to-offline services

Chinese search giant says it is investing 20 billion yuan (US$3.28 billion) over three years to develop online-to-offline services, which include its 2014 acquisition of group-buying site Nuomi.

Baidu has unveiled plans to pump 20 billion yuan (US$3.28 billion) over three years to develop online-to-offline services, commonly referred to in China as O2O services.

The Chinese search giant said the investment would focus on group-buying website Nuomi, which it acquired last year for US$160 million. "Right now, Baidu has over 50 billion yuan in cash on its books," said the company's CEO Robin Li in a statement, reported Reuters. "We're going to take 20 billion of that and do Nuomi right."

O2O services refer to e-commerce services that combine online sales and promotions with offline consumer experience, such as those provided by group-buying websites, where consumers purchase vouchers and discounted coupons online and use these when they physically visit restaurants or spas.

Baidu said it would unveil a "Membership Plus" offering for Nuomi that will allow participating merchants to use the platform to develop their own marketing tools, according to Reuters. This was aimed at improving consumer retention and increase consumption frequency.

In its first-quarter 2015 results, ended March 31, Baidu reported a 9.2 percent drop in operating profit over the same period last year to 2.339 billion yuan (US$395.1 million). Its revenue grew 34 percent year-on-year to 12.725 billion (US$2.05 billion), with mobile accounting for half of total revenue, compared to 42 percent in the previous quarter.


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