Chinese Internet search giant Baidu has launched its first online wealth management product, Baifa, in partnership with China Asset Management.
However, just within just one hour Baidu crashed due to the large surge of visits, resulting in a failure to take registrations on the Baifa accounts, according to the online edition of the Chinese-language Economic Observer.
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Initially, Baidu announced its annual fund return target as 8%, but since it is exceeding maximum permitted limit, the company re-announced that it does not guarantee a specific rate of return since such practice is not allowed by financial regulation.
Baidu has set its selling limit to CNY1 billion or around US$164 million.
Wang Tao, founder and CEO of EverString Technology, said: "This is Baidu’s first time setting up an online platform to sell financial products. Their 8% return promise was more for advertising purpose. They may make up the difference themselves."
"Internet firms traditionally rely on advertisement, games, and online trading platforms for their profits. But those profits are narrowing with more competitors in the pool. With their large user base, it’s inevitable that they are moving into the financial businesses," Tao added.
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