Tudou.com, the second-largest online video site in China, is making plans for an IPO on the Western markets, according to a report by Bloomberg. The offering, which Tudou CEO Gary Wang told Bloomberg was “inevitable,” comes as competition heats up in the Chinese online video market.
Compared to the U.S. or other geographies, the online video market in China is still fairly wide open. Without YouTube (s GOOG) there to dominate, China has three or four video sites all within reach of each other. Tudou is second in market penetration, according to research from Analysys International, with 12.8 percent share. Top Chinese video site Youku.com, meanwhile, has 17.7 percent share and No. 3 Sohu.com has 11.2 percent. (Compare that to the U.S., where YouTube has more than 40 percent share and the next-ranked competitor has about 3 percent.)
Chinese video sites have also been amassing large amounts of funding over the past year. Tudou announced a $50 million financing round last month, which was led by Singapore-based Temasek Holdings. In December, No. 1 video site Youku raised $40 million, with the possibility of raising another $40 million. Chinese search giant Baidu (s BIDU) is making a big push behind a new venture called Qiyi, which has raised $50 million and is being positioned as a Chinese Hulu.
In other words, it’s still like the wild west in China. Youku, Tudou and others are jockeying to attract new eyeballs by signing up content deals and pushing more user-generated content. Youku CEO Victor Koo told Bloomberg that China has 420 million internet users, and about 75 percent of the total already watch videos online at a preferred site. Without a clear winner yet, Chinese video players are therefore looking to grab market share by appealing to new users. Check out an interview we did with Koo about the Chinese video market below:
Related content on GigaOM Pro: A Guide To Online Video Monetization Options (subscription required)