Baidu’s Daily Android Active Users + Search Queries Grow

Baidu Mobile Optimizations GrowthAccording to Baidu, Android daily active users (one DAU representing a connection to the internet at least once daily) saw a net increase of 20m in Q2, up 10% QoQ (vs +56% QoQ in 4Q12 and +27% in 1Q13) despite a 30% QoQ increase in the
sales of Android devices in China. The slow-down in Andriod DAU growth likely owes to: 1) second-time purchases of Android devices and 2) some new Android users having yet to establish an internet connection. The report forecasts that Android DAU will surpass 300mn by year end, boosted by student purchases during the summer holidays.

Baidu Mobile Search Grows
Users were found to have spent more time on search and location-based services in 2Q13 compared to 4Q12. Time spent on search was up 30% over the 6 mos and on average 19 mins per day, while time spent on location-based services was up 25% in the same period and on average 8 mins per day. The daily frequency of mobile browser usage meanwhile gradually decreased from 5 times to 4 times in the past 6 months.

Among all categories of contents, books were searched for the most while search requests for education, games and life-related services (such as weather forecasts) increased the most. We believe this trend indicates that: 1) users have grown more accustomed to mobile search and 2) users prefer searching through specialized apps instead of web browsers (where most searching are executed on PC). In terms of application downloads, reading and camera/beautification apps showed greatest growth over the 6 mos through Q2 (+175% and +132%) while IM, video, music and anti-virus apps still led in terms of absolute number of downloads.

Baidu’s Mobile Experience Optimization
Baidu’s report shows that large PC-based websites (such as portals, search engines, major SNS, e-commerce, etc.) are more prepared for mobile usage. Large PC-based websites have made 55% of their PC-based website channels mobile friendly on average, compared to only 41% among medium-sized websites (such as specialized websites and local websites).

Users, however, tend to perform different search requests from specialized mobile applications than PC-based search. This is largely due to the fact that it can take much longer to fetch a search result on a mobile web browser than through native apps. The inconvenience may be tolerated on the PC but is magnified on small screens. We believe Baidu’s recent launch of mobile search with light apps might be one way to address such an issue.