Our recommendations on strategic shifts in China's search market
In a strategic pivot that holds crucial implications for Western brands’ digital presence in China, search giant Baidu is wagering its market leadership on artificial intelligence. This move comes as the company’s once-dominant 86% market share has contracted to 56% amid intensifying competition from tech powerhouses Alibaba and Tencent, and a generational shift to search on video platforms such as Douyin and Xiaohongsho (Little Red Book).
The stakes are particularly high for B2B marketers. As alternative search channels emerge through platforms like Xiaohongshu and Douyin, the traditional search paradigm that Western brands have relied upon for Chinese market penetration is evolving rapidly.
Under CEO Robin Li’s direction, Baidu is reimagining its core search product, with AI now powering 11% of search results. This transformation mirrors global trends seen with Google and Bing, but with distinctly Chinese characteristics. For marketing leaders, this shift presents both opportunities and challenges in the world’s largest digital market.
The real question facing CMOs isn’t just about Baidu’s market share—it’s about the fundamental transformation of China’s digital discovery landscape. As AI-generated responses begin to replace traditional search results, companies must rethink their digital strategies and advertising approaches.
Early indicators suggest Baidu’s AI integration is driving increased user engagement. However, the company faces a delicate balancing act between innovation and monetization, as AI-driven direct answers potentially disrupt conventional advertising models that global brands have long relied upon.
For Western B2B marketers, the implications are clear: China’s search marketing playbook is being rewritten. Those who adapt their strategies to this AI-first paradigm will find themselves better positioned to capture attention in an increasingly fragmented digital landscape.
Some of the shifts we are testing with clients include the following:
Short-term Actions
- Test search advertising across multiple platforms:
- Run test campaigns on Alibaba’s Quark search
- Explore advertising on Xiaohongshu’s search function
- Start small campaigns on Tencent’s platforms
- Adapt content for AI search:
- Use more natural question-and-answer formats
- Include clear business specifications and details
- Focus on direct problem-solving language
- Expand beyond traditional search ads:
- Develop content for industry-specific platforms
- Create educational content that answers common business questions
- Use video content on platforms like DingTalk
Long-term Strategy Changes
- Build presence on business platforms:
- Create official accounts on Zhihu for industry expertise
- Develop B2B content for Douyin
- Join relevant business communities on DingTalk
- Change budget allocation:
- Reduce dependency on Baidu search ads
- Invest in content creation for multiple platforms
- Set aside budget for testing new search platforms
- Develop AI-friendly content:
- Create structured data for AI systems
- Focus on clear, factual business information
- Build comprehensive digital knowledge bases
Whichever route you take, the search landscape is fragmenting and the short search-driven customer journey is no longer enough to gain customer trust in longer sales cycles.
Ambitious businesses need to be testing new platforms and formats to keep up with the changing habits of their customers.
