Already - China has over 100 million Internet Users and this is just the begginning. There's no question that Chinese Internet users will soon be the largest block of online users world wide. Over 87% of the Chinese Internet audience uses search. And given Internet search’s dominance of monetization and audience rankings globally, the competition for the top spot in the Chinese search market is pretty intense.Baidu, Google, Yahoo, Sohu and Sina are battling each other to be the leading provider of search in China. Currently the two largest search players, Baidu and Google, account for almost 90% of the searches (source: CNNIC Search Survey, 2006).
More than 3 out of every 4 Internet searchers in China use multiple search engines Therein lies one of the more interesting dynamics of this market: Baidu and Google clearly lead the field in all aspects of search, through the variety of searches they offer and the quality of their results. Sohu features more prominently in MP3 and video search, compared to its lagging ranking in web search. Yahoo, on the other hand, has been struggling with its local partnering strategy - as it failed to take advantage of large acquisitions locally, including 3721 and the much publicized Ali Baba. Indeed Yahoo's brand seems weaker in China compared to Google’s and other local players.
Baidu is currently enjoying virtually double the market share in all types of search over Google. A 2006 Study by CNNIC cites other reasons for Baidu attracting a large user base, including Baidu’s well-liked Bulletin Boards and its responsiveness. Baidu also benefits from its wildly popular MP3 search, which takes users directly to downloadable music. This could be a major headache for Baidu in the future if China decides to tighten its enforcement of IP laws, with respect to illegal music.
Sohu, Sina and Yahoo all draw significant numbers of users to their search sites through their popular free email offerings, but that’s still not enough to help them break into the upper echelon of search - currently occupied by Baidu and Google. In terms of brand awareness, Baidu once again stands out with 87% - while Google and Yahoo trail with 64% and 39% respectively (source: CNNIC Search Survey, 2006).
Furthermore, more than 50% of Baidu’s users are under 23 years old. Since 80% of people under 24 years old use the Internet in China, compared to a much lower ratio for older age groups, Baidu’s momentum is bound to continue. Maybe it’s for this reason, and lack of further explosive growth opportunity at home, that Baidu decided to launch its first international search in Japan last week.
While Google’s perception has improved considerably among Internet users in China, its refusal to offer its Gmail and Blogger services locally (due to privacy concerns) will probably slow its efforts to boost its user base. However Google continues to invest in the Chinese Internet market, with a minority stake in P2P player Xunlei - which is aimed at the local online video market. This move might have other benefits for Google, as Xunlei doesn’t support Baidu downloads for instance.
Among all the players, the one to watch is Tencent. Given its dominance in IM and success in entering new markets such as casual games, mobile chat and virtual goods - it has the value proposition to make a decent entry into the Chinese search market. The Chinese search market is bound to hold a few surprises in the next year or two, as most Chinese Internet users claim that factors such as duplication of results, freshness and quality of the way results are ranked, could use further improvement.
Speaking of improvement, Google apparently needs to pay more attention to the quality of its image search, as it returns virtually no images for the Chinese name of former president Deng Xiaoping. Baidu, on the other hand, could be leveraging its new Japanese office to offer a better service to its users searching for adult terms like “sex”. Baidu apparently returns only 3 results for “sex” in its Chinese site, whereas its new Japanese site returns 107,000 images for the same search term.
The Search Landscape in China is certainly worth watching..........
No comments:
Post a Comment