{"id":61117,"date":"2014-09-30T00:18:53","date_gmt":"2014-09-30T04:18:53","guid":{"rendered":"http:\/\/countingpips.com\/?p=61117"},"modified":"2014-09-30T00:18:53","modified_gmt":"2014-09-30T04:18:53","slug":"is-baidu-a-cheap-knock-off-or-investment-grade-innovator","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2014\/09\/is-baidu-a-cheap-knock-off-or-investment-grade-innovator\/","title":{"rendered":"Is Baidu a Cheap Knock-off or Investment-grade Innovator?"},"content":{"rendered":"
September 30, 2014<\/div>
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By MoneyMorning.com.au<\/u><\/a><\/p>\n

What’s the first thing you think of when you think about Chinese products?<\/p>\n

Is it quality and original design? Or is it mass production and low quality? Or, is it forgery and knock offs?<\/p>\n

The first thing I used to think of was copies.<\/p>\n

Traditionally, Chinese markets have been great at copying original products. Remember the old jokes about ‘Rolax’ or ‘Omaga’ watches? Or even the straight out copies of Nike and Adidas gear?<\/p>\n

It’s no great shock to anyone that you could probably buy a Manchester United top in China for about $5. That’s about $100 less than authentic gear. <\/p>

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The Chinese certainly have a reputation for knock off products. But that’s all changing, and one tech giant is leading the way.<\/p>\n

Copying products and stealing information is all too common. Cyber security<\/a> is clearly a global problem for global companies. You often hear about Chinese hackers targeting American companies and vice versa. Their purpose is to rip off trade secrets and corporate information.<\/p>\n

Corporate cyber espionage isn’t limited to China. Every major nation has a cyber-spy agency. There’s the NSA in the US, the GCHQ in the UK and the Australian Signals Directorate, to name a few of the big ones.<\/p>\n

However, today we’re not focusing on cyber security. That’s a topic we’ll cover more over the next few months. In particular, we’ll look at the opportunities it presents.<\/p>\n

My point today is that, though it may appear two companies are doing the same thing, the reality is likely different. In fact, it might be with the more unassuming company where the real opportunity lies.<\/p>\n

The lines can get blurry when it comes to ‘new’ technology<\/a>. Many companies have similar products. You might even think some have simply copied others.<\/p>\n

A good example is Baidu and Google<\/strong>.<\/p>\n

Although Baidu tries to distinguish itself from Google, it seems it’s following Google’s lead nearly every step of the way. A couple of weeks ago, Baidu entered the smartglasses market.<\/p>\n<\/p>\n

Is Baidu Like Google, or better?<\/h2>\n<\/p>\n

As we all know, Google has been developing Google Glass for a number of years. Hopefully, soon they’ll have product ready for mass market. But while Google develops and refines their product, others companies want to crash the party.<\/p>\n

Baidu<\/strong> is widely seen as the ‘Google of China’. They are easily China’s biggest search engine. China Internet Watch<\/em> estimates that Baidu has 81.7% market share of internet search by revenue in China. Google is next, with a tiny 10.9%.<\/p>\n

But Baidu wants more. Like Google, they know that to be a global<\/em> tech giant, they must diversify. So they are. Baidu has a new piece of wearable tech. They call it BaiduEye.<\/p>\n

BaiduEye is kind of like Google Glass. In the sense that it provides the user with real time information on their head, it’s very similar to Glass. But BaiduEye is different in that it will have no visible screen.<\/p>\n

Baidu thinks screens are distracting. Instead information will feed into the device through a camera perched next to the head. But it will provide audible information through its earpiece or the connected app.<\/p>\n

Baidu realise if they simply imitate Glass, they’ll forever be ‘China’s Google’. But in this case, they’ve purposefully gone a different route. My take on it is they want to change the public’s perception of their company image. They want the world to see them for what they are — a giant global search company. They’re like Google, but they’re certainly not Google or even a mere copy.<\/p>\n

To tar them with the brush of a rip-off copy of Google is what many from outside China will do. But when you consider the size of China’s market, they should reconsider. <\/p>\n

Baidu has no reason to copy Google. And by taking a different direction, they may prove to the world what they’re capable of.<\/p>\n

Look at it like this: China<\/a> has around 20% of the world’s population. In comparable terms, the population of China is roughly equal to the population of North America, South America, Australia, New Zealand, and all of<\/em> Western Europe<\/em>!<\/p>\n

When you look at it like that, who would want to be Google? China’s internet penetration is still only 45.8%, according to the China Internet Network Information Centre. Of those, around 81% connect via mobile.<\/p>\n

Baidu knows internet penetration in China will continue to grow. One day it may even be on par with Australia. That means around 83% of the population using the internet. <\/p>\n

Yes, it’s a long way to go. But when they get there, it will mean 1.12 billion people online (based on current population figures).<\/p>\n

No matter how you look at the numbers, China’s going to bring more and more users online in the coming years — most through mobile devices. And that means technology<\/a> like BaiduEye<\/strong> will have a huge market to tap.<\/p>\n

Baidu has a bright future. But don’t think of it as a Google imitator. They might be similar. But as an investment opportunity<\/a>, Baidu might be better.<\/p>\n<\/p>\n

R<\/p>\n

Sam Volkering+<\/a><\/strong>
\n Contributing Editor, Money Morning<\/em><\/strong> <\/strong><\/p>\n

Ed note: <\/strong>The above article originally appeared in Tech Insider<\/em><\/a>.<\/em><\/p>\n

Join Money Morning on Google+ <\/u><\/a><\/strong><\/p>\n

The post Is Baidu a Cheap Knock-off or Investment-grade Innovator?<\/a> appeared first on Stock Market News, Finance and Investments | Money Morning Australia<\/a>.<\/p>\n

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\nBy MoneyMorning.com.au<\/u><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

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