New Agreement Makes Baidu Wallet Uber’s Payment of Choice in China

May 6, 2015         By: Steven Anderson

The expansion of the mobile payment market is a field that’s long given us a lot of room for discussion, and a recent move between Baidu and Uber is proving no exception.

This time around, Baidu has set up a deal by which Baidu Wallet is reportedly set to become the payment method of choice for Uber users in China, a move that might well give both firms some serious advantage.

Reports suggest that this is part of a deal set up back in December 2014, in which both firms agreed to get some more work going together.

Uber had integrated Baidu’s mapping and mobile technology, suggesting that a greater partnership was in the making.

Indeed, this does offer some distinct advantage for both sides; Baidu gets a whole new and pretty valuable place for users to spend money using Baidu Wallet, and Uber gets access to the Chinese market backed up by a familiar payment platform.

However, that’s not necessarily good news. Indeed, some believe that the comparatively new alliance isn’t going to be enough to really give the firms much edge in the field. The problem is that as powerful as Uber is in the United States and beyond, it’s actually walking into a competitive field in China.

China’s taxi-hailing app market is largely controlled by Kuaidi Dache and Didi Dache, both of which are familiar platforms the Chinese are used to using. That alone would be bad news, but it doesn’t help matters much that Baidu Wallet, at last report, can only be used in nine major cities in China. Sure, these are cities like Beijing and Shanghai, representing millions of users total, but there’s still a big part of the market that the Uber/Baidu connection can’t reach.

Indeed, it will likely help Uber’s case here to be connected to the Baidu Wallet (and Alipay last year), but it’s going to have to make its case, and clearly, to pull entrenched users into its camp.

That’s a tall order—just ask Microsoft when it entered the smartphone market—and in order to do that it’s going to have to get some competitive advantages going.