Google struggles in China

22 September 2009

BEIJING: Google is still struggling to attract web users to its online search service in China, but may be able to improve its position by heightening its activity in the country's rapidly-expanding mobile market.

Having launched its search platform in China in 2000, the internet pioneer ran its operations in the Asian nation from the US until 2005, giving domestic rivals a chance to develop locally-focused services.

The main example of this has been Baidu, which went "live" a year after Google in China, but now has a 61.6% market share, compared with Google's 29.1%, Analysys International estimates.

While Google is said to be the preferred search provider for many of the "elite", Baidu attracts a large number of young users thanks to its online message forums and the ease with which it allows visitors to access pirated music.

Edward Yu, chief executive of Analysys International, the consultancy, said "it's not that Baidu is doing a better job than Google with products; some are actually worse."

"The problem is brand awareness. People don't know Google. They don't even know how to pronounce it," he added.

Google repositioned its Chinese portal as "GuGe" in 2006, because its name was difficult both to say and write for consumers in the country.

However, it is more frequently known as "GoGo", and people looking to log-on to its site only need to enter the web address

Another reason the US firm has struggled to make in-roads in the world's most populous nation is the uniquely complicated nature of the market.

David Wolf, president of the Wolf Group Asia, said "Google never seemed to drive brand awareness. Let's face it – it grew most places by word of mouth. It's never had to build a marketing operation. Here it's entirely different."

"Baidu has played the local card very well. The perception is it services Chinese needs better,” he continued.

John Pinette, a spokesman for Google, similarly argued "people associate us with foreign searches and English-language searches."

"It's up to us to present Google to university students or other people as a relevant and interesting place to go."

Indeed, Pinette said Baidu has been a "faster and more nimble competitor," requiring a strong response from its multinational counterpart.

One area where Google may be able to leverage its position more effectively is in the mobile market, where it has forged a partnership with China Mobile, the country's biggest cellphone provider.

Analysys International estimates the use of online search via the mobile web has increased by 120% in China over the last 12 months.

Baidu and Google each currently hold around 25% of the overall total, but the latter is expected to benefit from the launch of its Android-operated phone in conjunction with China Mobile.

There are around 700 million mobile phone users in China at present, and the mobile web is often their primary means by which to access the internet, given the comparative expense of buying a PC.

Google has also developed a legal, advertiser-funded online music download site, while Baidu has been sued by record labels for giving easy access to unlicensed material.

The Chinese government also expected to crack down further in this area in the near future, possibly benefitting the Californian giant in the process.

Data sourced from Los Angeles Times; additional content by WARC staff