The following article is reprinted with permission from Redtech Advisors.
Investor impatience with, or lack of confidence in, Baidu’s grand scheme for O2O seems to be annoying CEO Robin Li. He suggested in a press conference yesterday that Baidu may consider delisting in the US and heading home if US investors can’t properly evaluate or understand their effort in O2O. (English link)
Li said sales from O2O in China would eventually surpass those from the search market – it’s just a matter of “when this will happen,” he said. While O2O may be hyped in other countries, Li said China stands a better chance of converting hype to reality because it has a unique combination of drivers, such as a cheap labor force and a greater prevalence of mobile usage.
He may be right there, but he needs to prove it, as the O2O market has been a money burning bonanza up to this point. In the meantime, a delisting is unlikely – not only would it require a huge amount of capital, but the waiting period (average is about three years) would limit Baidu’s ability to access financing at a time when it needs to spend mightily to keep up with Tencent and Alibaba.
Related: In the group buy sector, Baidu’s Nuomi registered a third month of strong gains in both installations and active users. But Meituan is maintaining a robust pace, too, and off of a much larger base of users. Meanwhile, last week, the #4 player, Wowo, said it would sell off its group-buy business and other non-restaurant business to improve profitability. (Chinese link) That leaves three main players: Meituan, Dazhong Dianping and Nuomi.