1. China Search International
Guide to China’s Retail Sector

2. Baidu is China’s equivalent of Google…
Baidu is the major search engine in China with over 556 million regular users. That’s the
equivalent of all the Google users in Europe and Asia combined.
Population of China: 1.35 billion
Online Population: 618 million
Baidu’s Reach: 556 million

3. The world’s largest online economy
China already has the largest online population in the world at 618 million users.
Astonishingly that’s only 44% of their population, so their capacity for growth is enormous
0
100
200
300
400
500
600
618
245
121
101
79
53
20
44
79
10.2
80
39
84 89
Online Population MMs
% of Population online

4. Or to put it another way…
China
USAUKAustralia
= 50 million online users

5. China’s Retail Sector

6. Chinese Online Transactions have exploded
Online transactions reached $301.9 billion USD in 2013. It is expected to surpass $651
billion USD in 2017.
$75.03
$127.69
$212.08
$301.11
$398.76
$491.54
$585.94
$673.83
75%
70%
66%
42%
32%
23%
19%
15%
0%
10%
20%
30%
40%
50%
60%
70%
80%
$0.00
$100.00
$200.00
$300.00
$400.00
$500.00
$600.00
$700.00
$800.00
2010 2011 2012 2013 2014e 2015e 2016e 2017e
Transactions USD Billions Growth Rate (%)
Source iResearch, “2013 eCommerce market core value analysis”

7. Overseas e-Commerce Transactions are
growing at an even faster rate
Overseas e-commerce transactions reached $12.5 billion USD in 2013. The projected
growth rate is over 100% in 2014, reaching $25.3 billion USD by the end of the year.
$0.0
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
2009 2010 2011 2012 2013 2014e
$0.8
$2.0
$4.3
$7.9
$12.5
$25.3
China's Overseas e-
commerce transactions
(USD Billions)
Source: 100EC, “2013 China online retail market insight report”

8. All is driven by the Chinese middle class
The middle classes are expanding beyond the largest cities more rapidly & in greater
numbers than any market has ever witnessed. The number of Middle and Affluent
Consumer HOUSEHOLDS in China will be the same as the US by 2020
1
13
34
61
57
36
12
53
69
66
39
23
Household annual disposable income
(USD) thousands
Upper affluent >200
Lower affluent $16 - $31.5
Middle Class $9.5 - $16
Emerging Middle $6 - $9.5
Aspirant $4 - $6
Poor <$4
Households MillionsHouseholds Millions
Source BGS Consultants
Urban household disposable income 2020Urban household disposable income 2010

9. And their movement to online shopping
There were over 300 millions online shoppers in China in 2013, which is nearly half of the
total internet population. Year-on-year growth was at 48.9% during the same period.
242
302
42.9%
48.9%
39.0%
40.0%
41.0%
42.0%
43.0%
44.0%
45.0%
46.0%
47.0%
48.0%
49.0%
50.0%
0
50
100
150
200
250
300
350
2012 2013
Online Shoppers
(Millions)
% of Total Internet Users
Source: CNNIC, “China internet development status report”

10. They use all the same tools as
consumers in the west
10
Source: Nielsen, GlobalWebIndex Wave 6
Search Engines
80%
Watched Video
72%
Listened to Music
77%
Instant Messenger
67%
Uploaded Photos
60%
Activities performed online % Of users
Reviewed a product or brand online 74.58
Used webmail 74.08
Watched a video clip 71.64
Used internet banking 71.29
Purchased a product online 70.79
Used instant messenger 67.21
Uploaded photos online 60.47
Used online office applications 59.62
Post comment on forum / bbs 55.63
Manage your social network profile 54.04
Left a comment on a story on a
website 53.39
Used a micro blogging service 52.04
Bought prod/serv through group
buying site 49.55

11. But are even more socially connected
China has the most active social media society globally and is more
important as part of brand awareness building than perhaps anywhere
else in the world
270 million active users on WeChat
95% of Chinese trust
a brand more if on
social media
85% of Chinese
online shoppers
share the
experience on social
media
40% of online
shoppers follow
brands on social
media
9/10 online Chinese
have used social
media in the past six
months, versus less
than 6/10 in the UK

12. Connectivity across mobile has led to
massive mobile shopping growth
• In 2012, mobile transactions totaled
USD7.8 billion, representing 3.7 percent
of all e-commerce transactions in China.
However, by 2015 mobile commerce in
China is forecasted to more than
quintuple, to USD41.4 billion,
representing 8 percent of all e-
commerce transactions.
• According to data presented by Taobao,
the busiest time of the day for mobile
shopping is 10pm, and purchases made
by mobile devices are 67 seconds faster
than purchases made on personal
computers
Retailers need to provide a multi-channel experience for consumers.

13. Chinese Online Behaviour
Online Spending Habits
33.8% shop online
30.5% pay online
29.1% bank online
Reasons for Going Online
Research Products to Buy – 45.5%
Research for Work – 49.2%
Stay up to date news / events 51.3%
Most Popular Activities
Search Engine – 76.3%
Online News – 78.5%
Online Music – 82.5%
Online Trust
Chinese online consumers display a high level of trust
when it comes to conducting transactions online.
There is a considerably higher level of trust for brands
that use SEM than SEO. This is because the Chinese
public are actively purchase only from brands they are
familiar with.
As the Baidu screening process for advertisers is so
vigorous – the Chinese public place a high level of trust
in any brand that has been granted permission to
advertise. Hence the average CTR for Baidu’s SEM of
4.8%

14. China’s Ecommerce on Foreign sites

15. They shop online for a number of reasons
The top 3 reasons for China online shoppers to purchase overseas are competitive
prices, product quality and the scarcity of products.
Source: 100EC, “2013 China online retail market insight report”
Product Quality
Product Scarcity
Competitive price
Recommended by friends
More variety
Better service
Security
Better logistics
Easy to "Click & Buy"
Ease of refund / return
Others
21.8%
21.2%
20.3%
8.2%
6.0%
5.7%
5.5%
3.8%
2.9%
2.7%
2.0%

16. and buy different products compared
to local transactions
Due to the concerns in price and quality, fashion, personal care and baby products are
the most in-demand product categories for overseas e-commerce
Source: 100EC, “2013 China online retail market insight report”
5.8%
6.0%
7.3%
11.4%
37.8%
Books and Music
IT Products
Household Goods
Virtual Card
Fashion
Top 5 items purchased online
by Chinese in China
7.7%
9.4%
12.6%
12.9%
16.0%
Digital Products
IT Products
Baby Products
Personal Care
Fashion
Top 5 items purchased online
by Chinese on Overseas
sites

17. 80% of them are under 35 yrs of age
The majority of online shoppers in China are aged betweek 25-30 regardless of whether
they shop on China based or overseas e-commerce sites.
Source: 100EC, “2013 China online retail market insight report”
1.10%
6.80%
10.90%
25.30%
39.70%
15.70%
0.60%
51 and above
41-50
36-40
31-35
25-30
19-24
Under 18

18. And are more affluent
Overseas shoppers tend to be more affluent than those who limit their e-commerce to
China based sites. Over 80% have a monthly income between $488 - $814 USD.
Source: 100EC, “2013 China online retail market insight report”
2.3%
4.0%
1.4%
15.6%
23.2%
25.3%
9.2%
3.4%
1.3%
2.3%
0.0% 20.0% 40.0%
Above $8,140
$3,256 - $8,140
$1,628 - $3,256
$1,303 - $1,628
$814 - $1,303
$488 - $814
$326 - $488
$163 - $326
Below $163
No Income

19. Majority are living in Tier 1 cities but this will
change over the coming period
Most of the online shoppers who purchase overseas are living in Tier 1 cities in China,
like Beijing (12.2%), Shanghai (13.2%), Guangzhou (14.1%), etc.
Source: 100EC, “2013 China online retail market insight report”
14.1%
13.2%
12.2%
9.2%
7.2%
5.2%
4.0%
3.7%
Guangdong
Shanghai
Beijing
Jiangsu
Shandong
Zhejiang
Fujiang
Heibei
However, recently a new trend has emerged that shows
more and more online shoppers are coming from Tier 2
cities or below, accounting for nearly 30% of the total
overseas online shoppers population.

20. Success

21. Ingredients for success
Protect your brand and own it
- Trademarks, Chinese language brand & domain
- Block competition on search against the above
Develop awareness
- Display (banner & video) audience buying through RTB
Build performance
- Integrate SEM and Re-targeting (search and audience)

22. Register a Chinese business name
Protect your brand and create a Chinese language version
Search
Volume
Search
Volume
Search
Volume
(Monthly) (Monthly) (Monthly)
香奈儿 354,000 Chanel 141,000
迪奥 216,000 Dior 171,000
卡地亚 207,000 Cartier 72,000
路易威登 201,510 LV 516,000 Louis Vuitton 39,000
爱马仕 168,000 Hermes 54,000
阿玛尼 162,000 Armani 39,000
普拉达 87,000 Prada 252,000
范思哲 84,000 Versace 48,000
菲拉格慕 63,000 Ferragamo 27,000
万宝龙 57,000 Mont Blanc 7,200
古驰 42,000 Gucci 132,000
芬迪 36,000 Fendi 13,200
蒂芙尼 36,000 Tiffany 168,000
登喜路 28,800 Dunhill 36,000
巴黎世家 23,700 Balenciaga 13,500
梵克雅宝 23,100 Van Cleef & Arpels 5,700
蔻驰 21,600 Coach 264,000
圣罗兰 12,900 YSL 48,000
博柏利 12,000 Burberry 180,000 巴宝莉 90,000
杜嘉班纳 11,100 DOLCE&GABBANA 16,500
赛琳 5,400 Celine 66,000
Miumiu 54,000
Chloe 36,000
Loewe 20,400
Chinese Brand
Name
English Brand
Name

23. Baidu Products

24. Baidu Product Suite
• Baidu SEM
• Baidu Content Network
• Baidu Retargeting
• Baidu Brand Zone
• Baidu News
• Baidu Zhidao
Depending on whether you are looking to raise awareness of your brand as a pre-cursor
to driving sales, or you already have brand awareness and are looking to drive revenue,
Baidu has a product that meets your objective:
• Baidu Mobile
• Baidu Golden Ad Space
• Baidu Travel
• Baidu One
• Baidu Video
• Baidu XMO

25. SEM
Baidu’s search results look very similar to Google’s.
The results at the top / centre of the page are “exact
matches” to the keyword that the Baidu user has typed
in.
Results below the red box are organic search results.
The red box on the right shows “broad matches” to the
keywords that the Baidu users typed in.
A brand’s position on the page is influenced by their CPC
(the highest bidder for the keyword appears at the top of
the page) and the website quality score.
The quality score refers to how relevant Baidu feels each
keyword is for your client’s website. If a keyword
appears many times in a website and meta data, it will
have a higher quality score.
If you’re the highest bidder but have a low quality score
for a given keyword, you won’t be given the top paid
search slot.
Just like on other search platforms, Baidu don’t publish the exact algorithm that gets a
site the top advertising slot. We do know however that it’s a combination of quality score
and maximum keyword bid.

26. Content Network
How does it work?
Baidu tracks where web users go, what sites they visit, what search
terms they use and what they say on social networks.
The result is a very rich detailed profile that advertising clients can
use, to target exactly the right audience for their products.
Banner ads have an advantage over pure search results in that they
can use imagery, flash, text and levels of interactivity that a website
user is more likely to engage with.
It’s also great for clients whose campaign objectives include
extending brand awareness. The use of logos, colours and imagery
will do a much better job of extending the reach of a client’s brand
than search results alone.
The average CTR is 2-3% but increases to 5% if retargeting is used.
Baidu only charges client when their banner is selected or “clicked”
so they only pay for performance.
The average cost per click is only 0.20 USD on Content Network
making it a great choice for clients on a limited budget.
For the latest list of sites in the network – (make sure you view it on
Google Chrome so you can translate the content to English)
http://wm123.baidu.com/
Targeting Campaigns
Campaigns can be targeted by
- Day Part
- Sector e.g. financial sites or youth sites only
- Geo targeting (regions of mainland China, major cities, Japan,
rest of world)
- Keywords and negative keywords
- Types of sites visited recently
- Search terms used in the past 2 months
- Retargeting (via keywords or anyone who visited the site in the
past 30 days)
If your clients need to work on their brand recognition then Baidu Content Network is the
right choice. Rich graphics, animation and video can be targeted to more than 600,000
sites in China, with over 80 billion daily impressions.

27. Content Network
Video ads - Displayed in videos and
online game while loading.
Embedded ads - Available in 18 different
sizes and in JPG GIF or SWF formats.
Floating ads - move down the page and stay in the users line of vision.
Available in 3 sizes and in JPG GIF or SWF formats.

28. Retargeting
dfbadfb

29. Brand Zone
How does it work?
Brand Zone is Baidu’s equivalent of a home page take over. Brand
Zone clients can “own” the space above the fold whenever one of
their brand terms is searched on Baidu
Instead of just a search listing, Brand Zone provides true brand
exposure, ensuring users know who you are long before they make
it to your website
Best of all – Brands can also “own” their brand related keywords
exclusively. No other Baidu advertiser can use their keywords.
Their competitors can no longer capitalize on their brand equity
There is no equivalent of this on other search engines
Impressively, Brand Zone campaigns enjoy an average click through
rate (CTR) of 60-80%. Compare that to the Baidu SEM average
CTR of 4.8%
More than half of everyone that views a Brand Zone campaign
interacts with it. That’s a measurable proof of brand awareness
What to expect
Costs for Brand Zone are bespoke and offer a fixed price for
unlimited clicks. They’re based on the volume expected for each
keyword used. This is not a cheap option and hence only cost
effective for blue chip brands who can expect huge traffic levels
Keep in mind that Brand Zone campaigns can only use keywords
owned by the brand – and they can only be used on exact match
(not broad match)
So if you own a hotel called Oceanside Hotel in San Francisco, you
would be able to use:
“Oceanside Hotel San Francisco” or “Oceanside Hotel”
but not
“San Fransico Hotel” or
“Hotel”
Brand Zone represents the best possible exposure for clients who already have a
“known” brand in China. This service is generally utilised by “blue chip” clients whose
brands are household names.

30. Block competition against your brand
• 100% share of voice
• Exclusive ‘own’ your branded keywords
• Creates over 20 points of entry from a single
execution
• Integrates with social media
• Available in rich media format
• 65-90% CTR
Brandzone

31. Brand Zone - Desktop
This successful campaign from Burberry includes logos, videos, animated gifs, multiple
product photos, latest news, deep links and social media. (Translated from Chinese
using Google Translate)

32. Brand Zone - Desktop
Chanel’s Brand Zone campaign includes logos, latest news results, product promotions,
links to videos, their official television commercial, social media links, downloads and
links to their iPhone app.
(Translated from Chinese using Google Translate)

33. Brand Zone – Desktop
Rolex dominates their competition with this campaign showing animated gifs and a full
table of their biggest selling range for men and women. (Translated from Chinese from
Google Translate)

34. Brand Zone
Unfortunately they’re half way down the page
surrounded by competing brands and e-
commerce sites.
Rolex has avoided this battle altogether. The
choice to use Brand Zone has guaranteed Rolex
not just the top slot but the entire area above the
fold. They didn’t just beat their competition; they
removed them from the platform.
Compare this to one of Rolex’s key competitors Omega.
Omega has chosen to concentrate on SEO rather than paid search and they’ve done a
pretty good job of it. They have the third organic search spot. Meanwhile the paid
search slots have been taken by Omega resellers.
Omega’s official site
Paid Search results

35. Brand Zone – News Portal
Baidu News comes with customized ‘official news’ and ‘news module’.

36. Brand Zone – Video Portal
Baidu Video comes with official HD video, business introduction and a takeover
presence.

37. Brand Zone – Image Search
Baidu Standard Image comes with a mega big rotating picture at the top and Baidu
Advanced Image will have the first page dedicated to one brand with four big rotating
pictures.

38. Brand Zone – Knowledge Portal
Baidu Knowledge Portal comes with customized information and large image of the
brand.

39. Brand Zone Matrix
Brand Zone campaigns display on both desktop and mobile platforms as well as 4 of
Baidu’s most popular internal platforms
Video Search
Over 120 million in daily
traffic
Mobile Keyword Search
Over 40% of Baidu’s audience
Desktop Keyword Search
Image Search
China’s biggest image search with
over 250 million daily users
News Search
China’s biggest news
search platform
Baidu Knowledge
Zhidao - China’s biggest knowledge
portal (Yahoo Answers)
BRAND ZONE

40. China Search International
Overview
We are Baidu’s International Partner, not an agency.
That means our business model does not rely on
charging management fees.
In fact – the only charge you or your clients will ever see
from us is a 2.5% processing fee to cover our banking
and foreign exchange fees. In essence we are paid by
Baidu to sell Baidu.
With offices in Singapore, San Francisco, Sydney and
London we’ve guided hundred of clients through the
complex Baidu processes.
We’ve all worked previously at major brands / agencies
in the UK, USA and Australia so we understand your
requirements and the importance of managing your
client’s expectations.
The result is that we’re well placed to help your clients
launch on Baidu in the most cost effective and hassle
free way.
Some of our more well known clients
We are Baidu’s International Partner. Our clients are predominantly international
companies looking to capitlise on opportunities in China.

41. How is Baidu different?
Baidu is pre-pay
It works a little like a pre pay mobile phone. Clients add funds to
their accounts and their campaigns run until those funds run out.
They can add a top up at any time.
Everything is in Simplified Chinese
We see an 85% drop off rate whenever Baidu users see a page in
English. As a minimum clients should commit to a Chinese
language landing page.
It takes time to open an account
It takes approximately 1 week to open a new account once Baidu
have all the necessary documentation from your clients. During this
time they are checking that the business is legitimate.
Opening accounts in restricted industries such as pharmaceuticals,
finance and the medical industry can take significantly longer.
No Agency accounts
Unlike Google, there’s no concept of an agency account on Baidu.
That means that every client (in fact every domain) must have a
separate Baidu account and be individually approved by Baidu.
It is however agencies are using a bid management tool, it is
possible to continue managing accounts in the same way. Baidu
can provide an API to their platform to allow your accounts to be
managed seamlessly.
What works on Google won’t necessarily
work on Baidu
It’s not just a matter of language. The Chinese search in a very
different way to Western cultures. You need more than just
translation, you need localisation by SEM experts.
Baidu doesn’t operate like other search platforms. Here’s some of the key differences.

42. Our Free Services
• Translation of all documents for submission
to Baidu
• Facilitation of the account opening process
• Provision of bespoke keyword lists where
required
• Translation and volume checking of
keywords
• Provision and / or translation of ad copy
• Loading of keywords into the client’s Baidu
account ready for launch
• Bid Management API application on the
client’s behalf
• Full training on how to manage accounts on
Baidu (use of the Baidu console)
• Issuing of invoices in the client’s preferred
currency and transferring of funds into the
client’s Baidu account.
• Provision of research decks on relevant
sectors and updates in the Chinese market
• Pitch Support (provision of keyword
proposals, research and recommendations)
CSI are not an agency. Our role is to help International companies to launch on Baidu.

43. Getting in Touch
Should you have additional questions,
please don’t hesitate to get in touch:
Matt Brown
Sales Director EMEA
Matt.B@baiduint.com
+44 7900 692149
www.baiduint.com