1. Introduction

Founded in 2000 by Robin Li, Baidu has since become the leading search engine in China. Its primary success can be attributed to its ability to localize services for the Chinese market, a capability that set it apart from global competitors such as Google. The Company’s slogan “Baidu it, and you’ll know it” became ingrained in Chinese internet culture, symbolizing reliability and trust in Baidu’s search results. Baidu’s initial market dominance was aided by a robust advertising model and a wide array of services, including maps, cloud storage, and AI-based tools. Nevertheless, the digital landscape has undergone a significant transformation. Competitors such as Microsoft Bing have made notable strides, with Bing overtaking Baidu in desktop market share in April 2023 by leveraging advanced AI technologies like GPT-4 [1]. This shift highlights the need for Baidu to boost its AI capabilities to better meet user needs, particularly in the areas of privacy and personalization. In addition, expectations of data privacy differ greatly between China and the West, and Chinese companies such as Baidu do not protect user data as rigorously as they should, a difference that poses a challenge for Baidu to expand its services globally [2]. The research seeks to examine the current marketing challenges facing Baidu, focusing on its brand positioning, the effectiveness of its slogan, and the role of AI in shaping the future of the search engines. Furthermore, it explores Baidu’s internal strengths and weaknesses, as well as external opportunities and threats, and proposes possible strategies for improving Baidu’s competitiveness, such as AI integration and privacy practice enhancements, combining PEST, SWOT, and STP analyses. In short, the research can help extend to Baidu’s long-term sustainability as a market leader by emphasizing how integrating AI and addressing privacy concerns can help the company meet modern consumer demands and regain its competitive edge.

2. The Current State of Markets and Enterprises

2.1. Overview of Recent Crises Facing Baidu

In recent years, Baidu has faced a series of crises, mainly related to data privacy and misinformation issues. Its filtering practices are more subtle than Google’s direct censorship through the Great Firewall, which has led to a growing distrust of Baidu among Chinese users. This complicates Baidu’s ability to maintain credibility while complying with political directives [3]. In addition, Baidu’s browser suffers from serious security vulnerabilities, including insecure personal data transfer and the use of outdated encryption methods. And these vulnerabilities expose Baidu users to potential surveillance and data breaches, raising concerns about its commitment to user security [4]. As a result, public trust in Baidu has plummeted due to several scandals involving the misuse of user data. Related research suggests that Baidu’s privacy policy provides more notice than choice, leading to significant concerns about how personal data is collected and used without sufficient user consent. This highlights a critical weakness in Baidu’s approach to data protection, especially as concerns about data privacy grow globally [5]. Meanwhile, competitors like Bing, have capitalized on these weaknesses by emphasizing privacy protection and offering more sophisticated AI integration. And Bing’s ability to deliver more personalized and accurate search results, powered by AI technologies such as GPT-4, has led to a shift in the search engine market. By April 2023, Bing’s desktop market share reached 37.4%, exceeding Baidu’s 27.01% [6]. This drop highlights the urgent need for Baidu to address consumer privacy issues and improve its AI capabilities to stay competitive. To regain public trust, Baidu must adopt stricter data privacy measures and increase transparency in its data handling practices. By prioritizing privacy and leveraging AI advancements, Baidu can begin to rebuild its credibility and address the evolving needs of modern users. Moreover, Baidu’s value proposition and market focus on Chinese-language users affords it a unique competitive advantage in the local market. However, to remain competitive in an increasingly global and dynamic landscape, Baidu must prioritize product differentiation and user experience [7].

2.2. Macro-environmental Analysis: The PEST Framework

The operations of Baidu are greatly shaped by several macro-environmental factors, including political, economic, social-cultural, and technological aspects. Politically, Baidu operates in a strict regulatory framework that imposes significant constraints on Internet content and data processing. Harsh Internet censorship and stringent data usage laws require it to adhere to policies limiting the types of content it can display. Recent draft regulations on generative AI further mandate that companies like Baidu ensure their AI-generated content aligns with mainstream values and does not threaten national security or social stability [8]. This regulatory pressure poses a challenge for Baidu, as it must balance compliance with user expectations for transparency and access to information. Moreover, these regulations require increased investments in compliance measures, which may slow down innovation and development. Economically, economic growth has been a significant driver of Baidu’s digital advertising revenue. However, global economic uncertainties, such as the US-China trade war, have negatively affected Baidu’s business model by reducing aggregate real income in both countries [9]. Rising competition in the AI-driven advertising sector also threatens Baidu’s traditional revenue streams. To adapt, it needs to diversify its revenue model by emphasizing AI-powered services that cprovide value beyond traditional advertising. The increasing penetration of mobile internet in China, particularly in rural areas, offers a significant opportunity for Baidu to expand its reach through a mobile-first strategy. Social-culturally, privacy concerns among Internet users have grown significantly in recent years. According to a survey conducted in the third quarter of 2023, over 38% of Chinese internet users use ad-blocking tools, and 20.6% express concerns regarding how companies manage their online data [10]. This reflects a shift in consumer preferences, with users demanding greater privacy and control over their data. There is also a growing demand for emotionally engaging and authentic marketing strategies, which Baidu has not yet fully embraced. To retain and attract users, it must align its services with evolving consumer values by prioritizing privacy and enhancing engagement via personalized marketing campaigns. Technologically, rapid advances in AI have reshaped the competitive landscape of search engines. For instance, Bing has successfully integrated GPT-4 to offer more personalized and interactive user experiences [11]. In response, Baidu launched ERINE in 2023, but the initial reception was mixed, with analysts describing it as “sophisticated yet lacking in innovation” [12]. To stay competitive, it must invest more in natural language processing (NLP) and machine learning to boost personalization and develop innovative AI features. Enhanced AI capabilities will be key to meeting the demands of modern users, particularly in delivering relevant, timely, and context-aware information.

2.3. Micro-environmental Analysis: The SWOT Framework

The SWOT framework offers a detailed analysis of Baidu’s internal strengths and weaknesses, as well as external opportunities and threats, allowing for a nuanced understanding of the company's current status. Baidu’s strengths lie in its early adoption of AI and deep integration into the Chinese market, providing a competitive advantage in understanding local consumer behavior and preferences. For example, Baidu’s ERINE exemplifies AI capabilities tailored to Chinese language nuances, setting it apart from global competitors. In addition, Baidu’s extensive ecosystem, including spanning search, maps, cloud services, and AI tools, enables the company to deliver a broad range of products, thereby increasing customer stickiness and cross-service engagement [12]. However, Baidu’s weaknesses are evident, particularly its over-reliance on traditional advertising and slow adoption of cutting-edge AI technologies. In contrast to Bing’s rapid integration of GPT-4, its lagging AI development has resulted in a loss of market share [11]. Public trust in Baidu has significantly declined due to privacy concerns, which Bing and other competitors have leveraged by providing more transparent and privacy-focused services [5]. This situation highlights its need to innovate and innovate and more aggressively establish trust-based relationships with users. In terms of opportunities, the rapid advancement of AI presents a chance for Baidu to improve its offerings and regain a competitive edge. Enhancing its AI algorithms can enable the company to deliver personalized, real-time search results, improving user experience and engagement. If Baidu invests in machine learning to develop advanced recommendation systems, it could offer a better-tailored experience, akin to Amazon’s use of personalization to boost customer satisfaction [13]. Also, the rise of mobile internet usage in rural China provides Baidu an opportunity to expand its market presence with mobile-first solutions targeting underserved segments effectively [14]. Baidu faces significant threats from growing competition, particularly from domestic and international players who leverage AI more effectively [15]. Bing’s recent market share gains highlight how Baidu’s competitors are surpassing it by focusing on AI-driven personalization and privacy. [6]. Besides, the growing demand for data privacy and emerging regulations on user data handling restrict its previous freedom in managing data. And this limitation is worsened by competitors’ proactive compliance with privacy standards, which positions them as more trustworthy in the eyes of consumers [7]. Baidu must tackle these threats by enhancing its AI capabilities while ensuring that its data practices meet evolving regulatory standards.

2.4. Target Customer Segment Analysis: The STP Model

To effectively reach its target audience, Baidu employs the Segmentation, Targeting, and Positioning (STP) model, which allows the company to identify distinct customer groups and tailor its strategies accordingly. Baidu segments its customer base primarily by demographics, behavior, and geographic location. Key segments include young, tech-savvy urban users who value personalization, privacy, as well as transparency, as well as users in rural areas where internet penetration is still growing [16]. Younger users, particularly those aged 18-40, have higher expectations of privacy and personalized services. They are more likely to adopt new technologies, making them ideal candidates for Baidu’s AI-driven offerings. In addition, rural users are interested in localized content and services that address regional needs, presenting an opportunity for Baidu to expand its reach through tailored solutions [14]. In targeting, Baidu focuses on younger urban users and rural customers with tailored products. For urban users, it highlights AI-driven personalization, privacy features, and advanced search capabilities to meet their needs for individualized experiences and transparency. This group also values innovative technologies, making it essential for Baidu to integrate AI effectively in its core services. For rural users, Baidu aims to provide localized content and mobile-first solutions that address specific needs, especially as internet access continues to improve in these regions [14]. In terms of positioning strategy, Baidu aims to establish itself as a reliable, privacy-focused search engine that prioritizes the needs of its users. In response to shifting consumer expectations, it is repositioning itself to emphasize AI-driven personalization and data privacy. The slogan “Search on Baidu, Powered by You” reflects this focus, aiming to connect with users who seek more control over their online experiences. By highlighting its advances in AI and commitment to privacy, Baidu aims to differentiate itself from competitors like Bing, which have made significant gains in these areas [17]. This repositioning is vital for Baidu to regain user trust and compete effectively in urban and rural markets.

3. Baidu’s Improvement Strategies

To regain its competitive edge, Baidu must implement a series of improvement strategies focused on enhancing AI capabilities, addressing privacy concerns, and rebuilding a strong brand presence. These strategies are aimed at both the short-term and long-term growth of the company, ensuring sustainable success in an evolving market landscape.

3.1. Major Improvement Potential

Baidu has significant potential for improvement, particularly in the areas of AI-driven personalization and user engagement. While competitors like Bing and Alibaba have rapidly adopted AI technologies to provide more intuitive and real-time search experiences, Baidu’s progress has been comparatively slow [12]. It needs to leverage its AI capabilities more effectively to deliver advanced personalization, which can enable a more tailored and user-centric experience. For instance, enhancing the ERINE to include advanced NLP features can significantly improve user interaction and satisfaction. Additionally, privacy remains a critical area where Baidu must improve [18]. By adopting stricter privacy measures and enhancing transparency regarding data processing, Baidu can address the growing consumer concerns about privacy. Implementing features like user-friendly privacy controls and clearer data usage policies can help rebuild public trust. In addition to restoring Baidu’s reputation, these measures can position it as a company that values privacy, which is a key factor in differentiating Baidu in a highly competitive market.

3.2. Specific Improvement Targets

To reclaim its market position, Baidu should focus on key improvement areas, such as fully integrating AI into its search algorithms, enhancing user privacy, and fine-tuning its marketing strategies. AI-powered personalization is crucial for meeting modern user expectations by offering real-time, context-aware results tailored to individual preferences. Investing in advanced machine learning and NLP capabilities will allow Baidu to provide a more responsive and personalized search experience [17]. Furthermore, addressing privacy concerns head-on by improving transparency and data-handling practices is essential for rebuilding consumer trust [5]. For example, Baidu could implement privacy dashboards where users can easily access and manage their data. Besides, refining its brand messaging to communicate these privacy improvements more effectively would further enhance user perception and loyalty. Lastly, Baidu should also update its slogan to reflect these advancements and reposition its brand as a forward-thinking, privacy-focused search engine. This rebranding effort, coupled with AI enhancements and a focus on user privacy, will enable Baidu to regain lost market share and strengthen its position in both domestic and international markets.

4. Baidu’s Short-Term Marketing Initiative

Baidu’s short-term marketing initiatives must focus on rebuilding trust, improving user experiences, and modernizing its brand identity. The key areas to address include brand repositioning, AI integration, a slogan update, and optimizing distribution channels.

4.1. Brand Repositioning (Branding & PR)

Baidu must aggressively reposition its brand to effectively address the privacy and transparency issues that have damaged its reputation in recent years. Launching a comprehensive public relations campaign is essential, focusing on Baidu’s commitment to data protection and user privacy. Through transparent disclosure and an aggressive communications strategy, Baidu can gradually rebuild consumer trust and loyalty. In addition, Baidu’s brand story needs to be refreshed to highlight its significant advancements in AI and its continued focus on delivering personalized user experiences. The rebranding of the brand story should emphasize the company’s efforts in technological innovation, including the introduction of more advanced natural language processing and intelligent recommendation systems that enhance the overall user experience. By showing real-world examples of these technologies in action, Baidu can demonstrate to users that it is committed to meeting evolving needs. Baidu should also strive to portray itself as a forward-looking technology company, emphasizing its leadership in AI-driven technologies. By illustrating how these technologies deliver value for users, it can bolster its competitive advantage in the industry while also appealing to privacy- and security-conscious consumers.

4.2. Integration of AI Technology and Enhanced User Experience (Product)

Baidu’s AI integration should prioritize enhancing the user experience by offering more personalized search results and a smoother interface. By refining its NLP algorithms and AI-based recommendation systems, Baidu can provide users with a more seamless and responsive search experience [17]. Real-time adjustments based on user preferences are especially critical in its competition with rivals such as Bing, as it can provide users with localized and context-aware search results. In addition, Baidu can leverage its leading position in the Chinese market to integrate real-time updates from local news and knowledge sources, a localization advantage that global search engines such as Bing find difficult to effectively replicate. Meanwhile, it can present credible sources and authoritative information about popular topics in China through its AI-driven algorithms. Fast and reliable access to information has become a key advantage for Baidu amid tightening regulations on information flow. By improving its ability to deliver real-time, verified data, Baidu can meet the demand for accurate, immediate updates from both individuals and businesses. Additionally, Baidu must address privacy concerns with more transparent data practices to balance responsible AI development and rebuild user trust.

4.3. Slogan Update (Promotion)

Kohli et al. highlight that a well-crafted slogan significantly enhances brand recognition and equity. By updating its slogan to emphasize user empowerment and privacy, Baidu can build a stronger connection with its target audience, enhancing both recall and loyalty [19]. Baidu’s current slogan, “Baidu it, you know it,” no longer resonates with today’s privacy-conscious and tech-savvy consumers. To effectively reposition its brand, Baidu should update its slogan to reflect its renewed focus on user-centricity, privacy, and AI-driven personalization. In addition, research by Mathur and Mathur suggests that announcements of advertising slogan changes positively impact a firm’s market value, signaling to investors that the firm is strategically repositioning itself to improve future profitability [20]. The proposed slogan, “Baidu it, powered by you,” emphasizes Baidu’s commitment to empowering users by giving them more control over their data and delivering personalized, AI-enhanced search experiences. This new slogan aligns with the shift in consumer expectations towards transparency and personalization, allowing Baidu to better connect with its target audience. Also, Smirnova (2016) emphasizes the importance of linguistic iconicity in creating memorable and emotionally resonant slogans. A slogan such as “Baidu it, powered by you” not only reflects Baidu’s shift toward user-centricity but also utilizes sound symbolism to evoke a sense of empowerment and control among its users [21]. By highlighting Baidu’s advancements in AI and its commitment to user privacy, the updated slogan aims to rebuild trust and differentiate the company from competitors like Bing, which have already capitalized on similar themes. This rebranding initiative is essential for Baidu to convey a clear and compelling message that resonates with modern users who value privacy, empowerment, and cutting-edge technology.

4.4. Distribution Channel (Place)

Baidu must enhance its distribution strategy to ensure its services are accessible to a broader audience, particularly in an increasingly mobile-first market. The growing dominance of mobile internet usage in China presents a significant opportunity for Baidu to optimize its mobile-first strategy. This involves improving the user experience on mobile platforms, enhancing app functionality, and partnering with local mobile service providers to expand its reach in both urban and rural areas [14]. For urban users, Baidu should focus on providing seamless integration across devices, ensuring that the experience on smartphones and tablets is just as efficient and user-friendly as on desktops. This requires optimizing its search engine for mobile browsers and enhancing the performance of its mobile applications to deliver faster and more personalized results. For rural users, Baidu can collaborate with telecom providers to improve internet access and offer localized services tailored to regional needs, making its products more relevant and accessible. Additionally, Baidu should explore partnerships with mobile manufacturers to pre-install Baidu apps on devices, particularly in regions where mobile adoption is still on the rise. By enhancing its distribution channels in a way that prioritizes user needs and preferences, Baidu can solidify its position as the go-to search engine for a diverse range of users across China.

5. Industry Trends and Long-Term Strategies

Baidu’s long-term success hinges on its ability to adapt to industry trends, particularly those pertaining to artificial intelligence and evolving consumer behavior. By focusing on AI integration and aligning with evolving consumer preferences, Baidu can ensure its competitiveness in the future.

5.1. Future of Artificial Intelligence and Search Engines

AI is reshaping the landscape of search engines, with emerging technologies such as NLP, machine learning, and generative AI driving major shifts in how users interact with information. Baidu has made progress with its Ernie Bot, but further enhancements are needed to fully leverage AI for personalization, user engagement, and market differentiation. The integration of AI across search algorithms allows for more precise, context-aware results, improving overall user satisfaction. To fully capitalize on this trend, Baidu must explore emerging AI technologies such as conversational AI and voice search, which have already gained traction globally and can significantly enhance market coverage, particularly for mobile users. Moreover, Baidu should consider integrating AI-driven content recommendations, similar to what platforms like TikTok have done to keep users engaged. These recommendations, powered by machine learning, can significantly improve the relevance of search results and increase user retention. Partnering with AI developers and investing in research to improve recommendation algorithms will allow Baidu to stay competitive and offer a more immersive search experience. To expand market coverage, Baidu must also explore integrating AI with new channels such as wearable technology and smart home devices. By doing so, Baidu can create seamless user experiences that adapt to various contexts, from a search initiated on a smart speaker to follow-up queries on a mobile device. And the integration can further establish Baidu’s presence in the growing Internet of Things (IoT) ecosystem, positioning the company as a leader in delivering innovative, cross-platform search solutions.

5.2. Shifts in Consumer Behavior

Consumer behavior is evolving rapidly, driven by changing expectations for privacy, convenience, and personalized content. Today’s consumers expect tailored experiences, and Baidu must align its services accordingly to meet these demands. Users are increasingly leveraging voice-activated assistants and other new technologies to search for information, highlighting the need for Baidu to optimize its offerings for voice search and conversational interactions. The shift from text-based queries to voice or even gesture-based interactions reflects a broader trend of consumers seeking more natural and convenient ways to access information. Additionally, there has been a significant rise in the use of social media as an information source. Platforms like WeChat, TikTok, and REDnote are now primary channels for content discovery and recommendations. Baidu must adapt by integrating social features into its search engine, allowing users to access crowd-sourced content and social proof as part of their search experience. This approach can provide a more holistic search journey that meets the evolving expectations for transparency and community-driven recommendations. Baidu must also focus on addressing privacy concerns more comprehensively. With the increasing emphasis on data privacy, users are more selective about the platforms they use for search and information. Implementing more robust privacy controls, similar to what Apple and Google have done with their data protection initiatives, can position Baidu as a more privacy-conscious option [22,23]. By providing clear, accessible privacy options, Baidu can reassure users and cater to the growing demographic of privacy-focused consumers. These shifts in consumer behavior underline the importance of innovation in both technology and user experience to maintain market relevance and loyalty.

6. Conclusion

This paper examines the present marketing challenges facing Baidu and outlines principal strategies for regaining competitive advantage in the changing digital landscape. Baidu once enjoyed a favorable position in the Chinese market thanks to its strong brand recognition and early investments in artificial intelligence. However, with the rapid development of AI, Baidu needs to overcome weaknesses such as slow adoption of new technologies and reputational damage due to privacy concerns. In order to regain its market dominance, Baidu shall fully integrate AI into its search engine products to deliver more personalized, real-time search results. By improving technologies such as natural language processing and machine learning, Baidu can better compete with rivals such as Bing. In addition, establishing a transparent data handling policy is key to rebuilding consumer trust and regaining market share. In the future, Baidu’s success will depend on its ability to adapt to industry trends, especially when it comes to AI and consumer behavior. By focusing on voice search and personalized recommendations, and ensuring that its marketing strategy is aligned with transparency and personalization, Baidu can solidify its market leadership. At the same time, Baidu needs to become more consumer-centric and ensure that its AI technology meets user demand for personalized and real-time search experiences. The advances of AI and the proper resolution of user privacy concerns will enable Baidu to maintain its competitive edge and continue to spearhead the industry.