Baidu Inc (ADR) (NASDAQ:BIDU) has signed a collaborative agreement that will allow it to divert users searching for products on JD.Com Inc(ADR) (NASDAQ:JD).
As part of the new deal, users searching for products on Baidu’s mobile search app will be diverted to a dedicated section where they can purchase products directly from JD.com. The latter happens to be the second largest online retailer and the move is a strategy aimed at improving the user experience. The firm can collect valuable data regarding customer preferences by encouraging them to stay within the app.
E-commerce and technology firms have recently been racing to convert information gathered from customers into sales. Such data allows them to come up with elaborate systems that offer a variety of services including news feeds, product suggestions and personalized ads among other things. It also allows the tech firms to customize these factors based on user preferences.
“Baidu can use its advantages in information to help JD greatly shorten the time between spotting an item to actual purchase,” stated Baidu.
Baidu also added that the move is also advantageous not only because it boosts the shopping experience but also because it makes it reduces marketing costs and enhances efficiency. The two firms did not disclose how many items will immediately be available on D’s site. However, the move is believed to be a significant step towards boosting Baidu’s ad revenue growth. Baidu’s revenue has recently adopted a bearish trend thus the need to do something that will encourage recovery.
JD.com is also expected to benefit from the deal in terms of advertising revenue from brands and merchants as well as increased sales. This is also not the first time that JD has carried out app integration. The firm has been collaborating its e-commerce platform with mobile applications ever since its integration with WeChat which is owned by Tencent Holdings. JD stated that the WeChat collaboration proved to be quite a successful move and it believes the same will happen with the new partnership with Baidu.
Baidu stock closed the latest trading session on Thursday at $222.57 after tanking by 3.36 percent from the previous close.