Baidu’s July 31 quarterly earnings demonstrate just how diversified that BAT – Baidu, Alibaba, and Tencent – have become. These companies are becoming far-flung in their scope, ascending as global powers.

While Alibaba and Tencent have attracted most of the attention of journalists and analysts for their ability to create global business ecosystems, Baidu has often been pegged as “the Google of China” for its reputation as China’s leading search engine. But Baidu is more than an influential search engine. Along with Alibaba and Tencent, Baidu is shaping how people live and work in the world’s largest retail market, China. And Baidu is expanding globally.

Baidu’s quarterly earnings results illustrate Baidu’s growth. Its revenue and profits both topped analysts’ estimates. Its online advertising business fueled the growth. But when you dig into the details, you see Baidu doing a lot more than advertising. As discussed in its earnings announcement, Baidu businesses include:

  • DuerOS, a conversational commerce platform that spans AI elements such as speech recognition, natural language processing, and image recognition. The platform fuels products such as smart speakers and facial recognition products. DuerOS is gaining headway via Baidu’s relationships with InterContinental Hotels, BMW Group, and other brands.
  • Apollo, which provides an open software platform for partners to develop their own autonomous driving systems through on-vehicle and hardware platforms. Apollo inspired many quarterly highlights, such as King Long Motor launching Apolong, China’s first fully autonomous L4 minibus, powered by Apollo. Among other highlights, Baidu and BMW Group formed a partnership to develop vehicle connectivity services and collaborate on autonomous driving and smart transport.

Baidu’s AI capabilities are also improving its core search and advertising business. For instance, as noted in its quarterly earnings announcement, Baidu “upgraded its AI-powered ad monitoring system, which can now remove bad ads at a rate of up to 4,500 ads per minute.”

Whereas Tencent and Alibaba are developing ecosystems built upon online commerce, Baidu is developing an AI-based ecosystem that spans multiple industries. At Moonshot, we have written extensively about how BAT are creating self-contained ecosystems that must be understood for any business to succeed in China. In addition, these ecosystems are spreading around the world. For example, Baidu is expanding its operations in the United States, centered on cloud- and AI-based services. Although Baidu lacks a powerhouse product such as WeChat or Taobao to hang its hat on, the company’s earnings show that it is an equal member of BAT.

And BAT are teaching the world about the power of business ecosystems. We recommend that businesses apply what we call the BAT Framework to assess the value and role of each BAT ecosystem against your own people, processes, and platforms. The framework covers questions such as:

  • People: for example, in which ecosystems are my most enthusiastic customers?
  • Process: what is the role each ecosystem plays in my customer’s journey?
  • Platform: in which platform does my product have the greatest traction?

Doing so will help you make sense of the competing ecosystems in context of your own business needs. For more insight into how to succeed in BAT’s world, contact Moonshot. We have the background and expertise to help businesses succeed.

Saul Delage

Saul Delage

VP Growth