Sep 292010

China’s largest online retailer,, is testing a new shopping search engine called etao, a company spokesman said on Wednesday.

Taobao, part of Alibaba Group, gave no other details about the search engine, but the analysts say the move is meant to bolster the company’s position as the top online retail and auction site in China.

Often seen as China’s version of eBay, Taobao currently holds a 75 percent share of the online retail market in the country, according to Beijing research firm Analysys International. While Taobao specializes in e-commerce, the company has also been developing its own search engine technology. Last year, Taobao launched a search engine for products being sold on its website.

The launching of etao will only bring more users to Taobao’s website, analysts say. But it will also put Taobao in more direct competition with Chinese search engine giant Baidu, which already dominates the country’s search market.

“A lot of people use Baidu for e-commerce searches,” said Chen Shousong, an analyst with Analysys. The search engine giant even has its own e-commerce site called Baidu Youa, launched in 2008. The site, however, only holds 0.11 percent of the online retail market.

To remain as the top online retailer in China, Taobao is aiming to corner the search engine market for shopping, analysts say.

“This is something Taobao has always wanted to do,” said Zhang Yanping, an analyst with consulting group iResearch. “Now the company is formally pushing it out.”

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