Google Losing Market Share in China
Two research reports (Beijing, Shanghai and Guangzhou internet users were interviewed) have been released about the Search Engines Market in China and both come to the same conclusion. The only part they differ on is the percentage of loss.
The China Internet Marketing Network Information Center (CNNIC) puts Google’s overall loss at 8%, ending at 25.3% while Baidu’s market share increases to 62.1%
China IntelliConsulting (CIC), a marketing research start-up whose founder was involved with previous CNNIC surveys, sees Google slide to 20.6%. A loss of 12.3% compared to last year. Baidu wins in this survey 13% and ends up at 65.4%. CIC though, released only the Beijing data for all relevant search engines
Baidu wins Shanghai Over
In previous surveys Baidu has a stronger following in Beijing compared to Shanghai. China Tech Stories explains this:
“Beijing has more students, Shanghai has more businessmen; Beijing users are more proud of being Chinese, Shanghai users like to make more money [which] may contribute to their choices of search engines.”
Baidu’s headquarters are in Beijing and most of its employees are from the Beijing universities
CIC however also released the market share per city for Baidu and their Shanghai foothold is growing to 58% [CNNIC even 58.9%], compared to 43.9% last year. Even businessmen are leaving.
The CNNIC sample for this survey was almost 4 times bigger than the CIC survey, 4500 to 1250. For that reason the former survey is likely more reliable. The result is either way that Google lost a considerable share.
Why such a huge drop in just one year?
There can be several reasons for this. For one, Google launched a chinafied (more censor friendly) version, Google.cn in April 2006 and called it Guge, meaning Harvest Song.
They accompanied the launch with a flash video [see the flash video plus translation] using a traditional China theme. Both name and video weren’t received well. Chinese Internet users are modern people and like to be addressed accordingly.
Half a year after the launch 72.6% (62.8% of the users whose first choice is Google) of the interviewed users still aren’t able to tell you the Chinese name of Google, according to CNNIC. This indicates that most Google users still use the Chinese version of Google.com, which wouldn’t be a surprise as Serge Brin admitted in June 2006 that almost all users use the non-censored version.
The real Google is in general slower in China and entering the wrong [read blocked words] keywords, results in a frozen browser. Probably to counter even more criticism they still don’t redirect users of the Chinese Google.com version automatically to Google.cn. Marketing wise re-directing would make more sense at this stage or maybe just re-branding themselves as Google in China, instead of Guge, would already help.
Baidu at the same time got listed on NASDAQ (August 2005) and received a lot of positive press coverage. It also offers easy access to pirate film and music downloads which is appealing to many young users.
There may be other reasons as well that effect the performance of Google.
China Web 2.0 Review points out that Google should go more local. Local in this case wouldn’t only be related to search results but also to the way Google is managed.
Demo China adds:
“By dictating business decisions about China from Mountain View, CA in the U.S., the [Chinese] opinions feel that Google isn’t making an effort to understand the Chinese search market.”
High-end users still favor Google
There is one field were Google is still in the lead, at least according to the CNNIC survey. High-end users are defined as non-student users who are at least 25, have a college degrees and earn a monthly salary higher than 3000 Renminbi ($377 US).
This is the group that probably has the finance to actually buy something on the web. I say “probably” as 3000 Renminbi won’t take you that far in a city like Shanghai. Google’s market share in this bracket has shrunk though since 2005.
It appears Google has a lot of work to do but it has the advantage of deep pockets and they are in China for the long haul. Baidu has the advantage of being Chinese.
Gemme van Hasselt is an Internet Marketing Consultant, living in Shanghai, China. His musings on life can be found on China Snippets