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Why Did Baidu Close Its Travel Platform?

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Jun. 28 2019, Updated 3:49 p.m. ET

Baidu’s travel business

Baidu (BIDU) shut down its travel information platform called “Baidu Travel.” The company shut down the travel platform as part of its business adjustments, according to Chinese media reports.

Baidu Travel was launched in April 2011. People could share information about travel like shopping and accommodations. The platform catered to people planning trips like overseas tourism. China is a major source of international tourists. The tourists spend hundreds of billions of dollars on their travels every year. Many Chinese technology companies have sought to tap into this opportunity. Alibaba (BABA) and Tencent (TCEHY) are partnering with overseas businesses to allow Chinese people to use their Alipay and WeChat Pay mobile payment services even when they travel abroad.

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Although the Baidu Travel platform is shutting down, Baidu isn’t shutting itself out of China’s booming travel industry. Baidu owns a substantial stake in Ctrip.com International (CTRP)—a China-based leading provider of online travel services. Baidu’s revenues rose 15% year-over-year to $3.6 billion in the first quarter.

Chinese tech companies

Baidu’s business adjustments, which led to the travel platform shutting down, appear to fit into a growing trend among China’s top technology companies. The companies are adjusting to a slowing economy at home and other pressures. Recently, Alibaba unveiled a corporate reorganization. The company’s Freshippo supermarket chain will be spun off as a standalone company. Alibaba has partnered with Starbucks (SBUX) to set up coffee kiosks inside Freshippo stores.

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