A screenshot of the Edaixi homepage. (Photo : FILE PHOTO)
China’s top Internet search engine Baidu has made an investment in online laundry service provider Edaixi, Chen Jinghua, a director at Edaixi, revealed to the Global Times on Wednesday.
The Beijing-based company just finished its second round of financing, which totaled $100 million, much higher than the $20 million it gained from the first round in November the previous year, according to media reports.
Chen did not disclose the amount invested by Baidu, but he added that the company also received funding from investment firms Matrix Partners and SIG China.
Founded in 2013, Edaixi offers laundry services aimed at China's growing online shopping demographic.
Customers can have their laundry picked up, washed and returned within 72 hours through the Edaixi app.
The app currently receives more than 100,000 orders per day in 16 cities from approximately five million customers, tech news portal 36kr.com reported on Wednesday.
It has a 90-percent market share in the online-to-offline (O2O) laundry business in those cities, the report said, noting that the new investment will be used for expansion plans to 100 more cities nationwide.
The second round of funding will be used to offer subsidies to Edaixi's customers, and to recruit foreign personnel to build up its "e-housekeeper" team with the aim of spreading further into the domestic market, according to the report.
Industry experts said that through Edaixi, Baidu can introduce its other O2O services and other payment tools to its users.
Baidu's investment in Edaixi is in line with the company's goal to expand its O2O business, Zhang Yi, CEO of the iiMedia Research Institute, said in an interview on Wednesday.
Baidu's shares fell to a 13-month low on the NASDAQ, following the release of its second-quarter report on July 27. The fall was attributed to U.S. investors' uneasiness over its O2O business. But despite this, Baidu CEO Robin Li said that the company aims to dominate the O2O industry.
The Internet search titan has already made several major moves in the O2O sector. In June this year, Baidu invested 20 billion yuan to develop its group-buying platform Nuomi.com, and has been reported to have invested 2 billion yuan in its classified site Baixing.com in July, according to several media sources.
"Baidu is seeking a business model that can generate cash flow, so it is increasingly focusing on the O2O sector," Zhang said.
Zhang noted that Baidu is facing shrinking revenue from its search engine business, based from its second-quarter financial report.
Gross merchandise value, which refers to the total value of goods purchased during a certain time period, from Baidu's O2O business reached a total of 40.5 billion yuan in the second quarter this year, surging 109 percent on a yearly basis, according to the report.
The O2O business represents the wave of the future as more users shift to smartphones from personal computers, and no Internet-based company can afford to ignore this trend if it aims to succeed, said Li Chao, an analyst from consultancy firm iResearch in Beijing.
Internet companies need to provide as many services as possible to its customers through their smartphones, and that will be the new source of income in the era of the mobile Internet, he said.
Meanwhile, in order to purchase goods and services, customers must pay via online payment accounts, providing valuable information for Internet-based financial services firms, according to Li.
