Chinese and Russian search engines size up Middle East market

China’s Baidu and Russia’s Yandex, the largest search engines in their countries, are taking their first tentative steps towards penetrating the Middle East market.

Baidu, which says it has more than 80 per cent of the search market in China, expects to launch an Arabic version of its portal within two years.

“It would aim at the non-English-speaking users,” said Yale Cui, the general manager of display ads at Baidu.

The company has had a presence in Egypt for two years but that is confined to mobile apps and represents only a sliver of Baidu's business.

Yandex, the largest Russian search engine by market share at 62 per cent, is targeting developing markets, including the Arabian Gulf countries, for expansion.

The company already has expanded to Turkey, Ukraine, Belarus and Kazakhstan.

In Turkey, which it entered two years ago, it has a market share of about 3 per cent.

“There is the market here with companies from here investing in Russia, and depending on how we fare in Turkey, we will expand the services here,” said Tatiana Kalinina, head of international sales at Yandex.

The company is working to expand its translations to German, French, English and South East Asian languages.

Baidu and Yandex are listed on Nasdaq. Over the past year, their shares have risen 97.7 per cent and 41.0 per cent respectively.

Last year, Baidu’s net income was 10.51 billion yuan (Dh6.28bn), up 0.6 per cent over the previous year.

Yandex’s net income last year was 13.5bn roubles (Dh1.35bn), up 64 per cent.

In comparison, Google had net income last year of US$12.92bn (Dh47.45bn), up 20.4 per cent. Its stock, which likewise trades on Nasdaq, is up 44.9 per cent over the past year.

Baidu’s Mr Cui and Yandex’s Ms Kalinina were interviewed yesterday on the sidelines of China-Russia Connect, a conference in Dubai.

The conference marked Baidu’s first formal attempt to increase its brand presence in Dubai (which incidentally is an anagram of Baidu).

Mr Cui said that with its Arabic portal on a two-year timeline for launch, the company’s immediate focus is on growth in the Japan, South East Asia and Brazil markets, where there are good prospects for a second player after Google and where English is not the dominant language.

Besides China and Egypt, Baidu (its name means “hundreds of times”) has a market presence in Brazil, Egypt, Thailand, Japan and Taiwan. Its revenues and users from the Middle East form less that 1 per cent of its totals.

On their home fronts, Baidu and Yandex base their confident outlook for growth on the untapped potential of those markets.

“Baidu has 600 million internal users daily, but our population is 1.6 billion, so there is a huge potential to grow,” Mr Cui said.

In comparison, Russia's daily internet users represent just over half of its 143 million population, according to the Public Opinion Foundation of Russia.

While online shopping is confined primarily to Russia’s two largest cities, Moscow and St Petersburg, where internet penetration is strongest, the number of users aged 18 to 24 is increasing and represents an emerging middle class, Ms Kalinina said.

Yandex means “my personal index” in Russian.

IMG Group – which is building Dubai’s first theme park, IMG Worlds of Adventure, in its City of Arabia development – expects to tap into the Chinese and Russian online markets as it courts potential visitors.

“The theme park would be among the top four destinations in Dubai, and we want to prepare the travellers before they got here,” said Adam Alexander Page, group vice president for marketing at IMG Group. He attended yesterday’s conference as a visitor.

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