China's Alibaba invests $157M in own search engine

E-commerce giant Alibaba launched its own search engine eTao last year

Chinese e-commerce giant Alibaba Group is investing 1 billion yuan (US$157 million) in its eTao shopping search engine, as part of an effort to turn it into a leading destination for online consumers, it said on Wednesday.

ETao works as search engine to find and compare products indexed on the site. It also allows users to search for Web pages, forum posts and group buying deals.

The search engine, launched last year, is just one of the sites operating under Alibaba Group, which is also the parent of Taobao Mall and Taobao Marketplace, two of China's largest online retail sites.

Until recently, Alibaba Group and it subsidiaries have been mostly silent on the new shopping search engine. In September, however, Alibaba Group CEO Jack Ma said the company launched eTao in order to ensure leading Chinese search engine Baidu wouldn't sleep well.

"If Baidu sleeps well then China's Internet users won't sleep well," Ma said during his speech.

Baidu currently has an 80 percent share of the Chinese search market, with Google a distant second, according to CNZZ.com, an Internet analytics site. Baidu has also entered into China's e-commerce market with its own online retail sites.

ETao, however, won't be a search engine solely for products offered under Alibaba. Instead, eTao is aiming to become a platform to search all Chinese retail sites, eTao president Wu Yongming said on Wednesday. ETao currently indexes products from 5,000 business-to-consumer sites in China.

But not all have been receptive to eTao's approach. Last week, the CEO of 360buy, a Chinese online retail site, complained in a microblog posting that eTao was using 360buy's reviews about products without its permission. 360buy and two other Chinese retailers have blocked eTao from crawling their sites for information, according to Alibaba.

Wu addressed the criticism on Wednesday and said Chinese retailers are still trying to understand whether eTao is a rival or a partner. "This will take sometime to recognize. But eTao is a partner," he said.

Wu also stressed eTao is meant to help users find the best shopping experience, by not only looking at product pricing, but the overall quality of service. "Consumers won't just see the top e-commerce sites, but through eTao, they can conveniently search for all products available."

By investing 1 billion yuan in eTao, the shopping search engine will also help vendors indexed on the site to gain exposure, he added. eTao plans to use the money on marketing campaigns and advertisements.

In July, eTao became a separate company under Alibaba Group, separating itself from Taobao Marketplace and Taobao Mall.

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