Instead of shaking up China's E-tail environment, this move is actually more likely to cement it. The chief rival to Youa had been Taobao, the E-Commerce site from Alibaba, which already had a better than 70 percent online marketshare. Youa officials asked its customers to move to Rakuten China, which is a joint venture with Baidu and Rakuten (Japan's largest E-tailer). From the U.S. retail perspective, this consolidation might make the half-billion Chinese E-Commerce consumers more open to global alternatives. Then again, as Google has discovered, China's government can create some serious hurdles if it wants to.
On March 31, China's largest search engine, Baidu, said it would shutter its E-Commerce shop. A Baidu official said the closing of the site, called Youa, "should not be seen as Baidu withdrawing from the E-Commerce scene," but it's awfully hard to interpret the move as anything else. The official said that Baidu was working on "a new E-Commerce platform product which will suit users better," said a Reuters story. But that doesn't change the fact that China's consumers won't be able to make purchases from Baidu for an unspecified—and quite likely lengthy—time.