Source: Baidu.
Robin Li is the co-founder, chairman, and CEO of Baidu (BIDU 1.43%). The company Li helped create has grown to become China's dominant Internet search engine, commanding a more than 80% share of this massive and fast-growing market. Yet the recent carnage in the Chinese stock market has led to a sharp decline in Baidu's stock price, with its U.S.-listed shares now down nearly 40% from their 52-week high.
So are Baidu's future prospects still bright, or are the company's best days behind it? And is the current pullback in Baidu's shares a good buying opportunity? To help investors decide the answers to those questions, here are some intriguing statements from Li.
1. On the incredible opportunity for e-commerce in China (via Re/code)
The market economy in China has only existed for 30 years. There are no strong offline businesses, essentially, in that market. When the Internet came up, a lot of patents rose to the Internet space. Then they realized there's a true opportunity to marry the Internet with certain verticals. Almost any vertical you can marry with the Internet and have better efficiency.
Retail is a perfect example. The e-commerce market in China, in terms of penetration, is roughly the same as the U.S., but the U.S. is growing 15% a year. China is going like 50% a year. That's because the offline retailers are so incompetent in doing things they should have been doing.
2. On Baidu's global aspirations
Sooner or later, you will see a China-based company that really has a global impact, and I think Baidu has a chance to become one of those companies. We should be able to compete on a global basis.
3. On Baidu's strong competitive positioning
As the Internet disrupts more and more traditional industries and mobile's importance continues to grow, Baidu is uniquely positioned with our competitive advantage as a leading cross-platform information gateway with world-class technology.
4. On Baidu's advantages over Google (via Tech in Asia)
In the mobile search era, there are huge differences between Baidu and Google [services], and even bigger differences in terms of philosophy. Google has spent more energy on the Android ecosystem, how to create more Android apps, and how to create industries that might become massive in 20 years, like driverless cars, health-focused hardware... they're thinking about that kind of thing.
For Baidu, it's about not only connecting information but also connecting services. For example if you open Baidu and input "cinema," it will tell you what theaters are within 1.1 km of you, what time the movies showing start, what seats are available to buy, and even let you pick a seat and pay directly. A whole series of actions can all be done from within Baidu [Search]. Google hasn't done this kind of thing. They don't see it as something they do: 'we'll index whatever's available on the web for you and that's enough.' In our eyes, China's web users don't care about whether or not these services are Baidu's responsibility, they just care about whether they can get what they want here [in our search].
5. On the possibilities for Baidu's online-to-offline initiatives
We are particularly pleased with the progress we have made in connecting people with services through innovative O2O initiatives like Baidu Connect—a better way for businesses to connect with their targeted consumers on mobile devices. It's an exciting time for Baidu. The O2O market opportunity is enormous, and our leading positions in mobile search and maps, as well as our extensive sales force, position us optimally to capture that opportunity.
6. On Baidu's successful transition to a mobile-based business
2014 was a year of remarkable accomplishment for Baidu. We've successfully transitioned from a PC-centric to a mobile-first company, positioning us well for the next phase of our mobile opportunity: connecting people with services. In December, for the first time search revenue from mobile surpassed PC.
7. On building a services-based ecosystem
Baidu is redefining the search box by building an ecosystem to connect people with services and drive closed loop transactions. Baidu's platform is comprehensive and robust, and we plan to fully exploit the huge growth potential ahead -- in mobile marketing, online to offline, and key select verticals such as healthcare, education and financial services -- by leveraging our solid mobile foundation, exceptional technology advantage, and proven operational experience.
8. On Baidu's continued evolution
With Baidu's cornerstone search business delivering solid growth and enjoying ample runway ahead, and with powerful mobile gateways to leverage, we are ideally positioned to capture the O2O e-commerce opportunity and build the "Next Baidu." As we continue to connect people with services and enable closed loop transactions, we are creating a transactional business model as Baidu grows and evolves in the age of mobile.
Key takeaways
Baidu is ideally positioned as a leader in Chinese e-commerce, with years and potentially even decades of strong growth still to come in this massive market. Yet fear -- brought about by a plunging Chinese stock market and concerns that the downturn will spread to other areas of the Chinese economy -- has given investors a chance to buy shares of this Internet titan at a substantial discount.
With Baidu's competitive advantages growing stronger and its visionary CEO positioning the company to grab an even larger share of the offline economy, long-term-minded investors may wish to consider taking advantage of this opportunity.
