COMPETITION in China's e-commerce industry will get even stiffer as Baidu.com, the country's No. 1 search engine, has just announced plans to enter the fray.

Baidu.com, which has about 60 percent of the search market in China, said it is working on its own online auction site to tap the growing spending by Chinese Web users who are increasingly used to shopping online.

The site, whose name and domain name are still to be worked out, will go online next year, according to a statement posted on its Website late on Wednesday.

"We are very excited to enter the rapidly growing Chinese e-commerce market," said Robin Li, chairman and chief executive officer of Beijing-based Baidu, in the statement. "Baidu's extensive user base and rich experience in Chinese language search makes e-commerce a natural step for expansion."

Baidu.com, the most popular Website in China by traffic, will also leverage its large online communities formed in its blog, BBS and question&answer services to build the consumer-to-consumer service.

The company has set up an e-commerce division to develop the site and is recruiting staff. The investment amount was not disclosed.

China's C2C online trading volume nearly doubled last year to 21.6 billion yuan, and is expected to reach 41.2 billion yuan this year, as the Chinese people's purchasing power grew while Web users are getting used to buying online with improved payment and delivery systems, according to the Internet Society of China.

Baidu.com will be competing with Alibaba.com Corp's Taobao.com unit, which took 83 percent of the nation's Web auction market in the second quarter, according to Beijing-based IT consulting firm Analysys International.

Taobao's share was more than nine times the nine percent pie of its closest rival Tencent Inc's Paipai.com.