Baidu, one of China’s leading search engine firms, recently inked a deal with United States’ Uber to expand and cater to the mobile-based taxi-hailing market, according to a TMTpost report.
Baidu announced the sealed agreement on Tuesday last week, stating that its mobile payment platform, Baidu Wallet, will become the prime online payment portal in the country for Uber's services.
According to TMTpost, the recent deal is part of the partnership signed by both firms in December last year. The country's Internet giant has been hoping that the U.S. startup could help boost its third-party payment platform.
However, the report also stated that although the agreement may bring benefits to both parties, it might not contribute much to overcome each company's problems in the fast-growing Chinese market.
In China, the market for taxi-hailing app services is already dominated by Didi Dache and Kuaidi Dache, both of which are more familiar to the Chinese masses. As well, the services offered by Baidu are only limited to nine major cities such as Beijing and Shanghai.
Officials and executives from the companies are still looking forward to a positive result.
Uber, on its part, may gain larger market share since Baidu Wallet is embedded in Baidu Maps, which has a 70-percent penetration rate in China's mobile user populace.
Baidu also stated that its mobile payment portal would gain grip in the country through the agreement with Uber.
Industry experts remarked that Baidu Wallet should consider more factors in its partnership with the taxi-hailing services firm.
These factores include the return rate for such a huge investment needed in the said business; the fractional market share of Uber; the government policies covering the app-based transportation market; and lastly, the still tough competition it may face with Alibaba's own online payment platform, Alipay.