Google returns to China

Today, BI, a well-known American technology media, reported that Google may cooperate with China's Huawei to let Huawei manufacture its next-generation Nexus smartphone.

Just last week, Sundar Pichai, Google's senior vice president of products, expressed his desire to return to the Chinese market.

This was mentioned by Pichai in an exclusive interview with Forbes magazine. He hinted that Google is very eager to re-enter the Chinese market. "I see huge opportunities there. We have a very favorable platform there. I hope we will have the opportunity to provide other services in the future."

After five years away, Google finally shows signs of returning to the Chinese market. So why did Google return to China? How will it face Chinese users? Here is what Youliao Jun thinks...

China's market has great potential

Today, no international technology giant can ignore the Chinese market. In particular, Apple, as a latecomer, has made a lot of money in China, proving the importance of the Chinese market.

In the fourth quarter of last year, Apple became the No. 1 smartphone in China thanks to the hot sales of iPhone 6 and iPhone 6 Plus. Apple's revenue from Greater China is now comparable to that of the entire European market.

Pichai himself admitted that the Chinese market has huge potential. "In China, millions of people buy Android phones, but these phones do not have Google's mobile services installed on them."

In fact, this also implies that Google is now eyeing China's mobile service market, not just search.

The global mobile payment war is about to break out

Although Google Wallet was launched earlier, it was overshadowed by Apple Pay, which later became popular in the global mobile payment market.

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This is how Google should return to China

In recent days, even Samsung has launched "Samsung Pay" to catch up with the mobile payment train. Moreover, Samsung Pay will directly compete with Google Wallet in the Android ecosystem, which is very disadvantageous for Google.

As for Apple's Apple Pay, there have been frequent rumors that it will enter China. I believe that it won't be long before all parties reach an agreement and Apple Pay can be used (lao) in China (qian).

One step slow, every step slow. In the payment war of 2015, Google should be anxious.

The rise of China's smartphone army

As Samsung loses its top spot in China's smartphone market, the Chinese army is becoming stronger and stronger.

The combined market share of mobile phone manufacturers such as Huawei, Lenovo, Xiaomi, and ZTE has surpassed South Korea's Samsung and LG, with China leading the world.

Most Chinese smartphone manufacturers use Google's Android system, which can be regarded as a stable backup force for Google. Especially in the context of Samsung's desire to develop its own system, it is particularly necessary to win over Chinese mobile phone manufacturers.

How will Google return?

Most people think that Google's return to the Chinese market means the return of Google Search. However, I would like to remind you that Google is not just about search, but also has many other businesses such as maps, email, video and application market.

In fact, it is a good choice to take a niche business as the vanguard, and the app store is one of them.

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This is how Google should return to China

It has been reported before that Google hopes to launch a new app store in China, which can restore order to China's chaotic app market and increase Google's revenue.

One possible approach would be to bring a version of Google Play to China, providing a single entry point for distributing apps and games.

However, to localize well, Google may need to work with a Chinese company to help it store applications in data centers in China, and may also need to build separate user authentication and payment systems.

Google has been planning this for more than two or three months. But during the time when Google was absent from the Chinese app market, the market was basically divided up by Baidu, Tencent and 360. If Google wants to join the battle, it means fighting against powerful local competitors. How can Google be sure to defeat these giants who have been cultivating for many years?

How many hurdles does Google have to overcome before entering China?

When Google first entered China in 2006, it was revealed that it did not have an ICP license in China and was suspected of illegal operations.

The ICP license refers to the "Telecommunications and Information Services Business License of the People's Republic of China" issued by local communications management departments, which is a license for website operations.

Only with ICP can we provide paid information and other services to netizens through the Internet, including online advertising, paid provision of specific information content, e-commerce and other online application services. According to relevant national regulations, commercial websites must apply for ICP certificates, otherwise they will be considered illegal operations.

So you can see the ICP license information at the bottom of most websites’ homepages. For example, Baidu’s homepage shows “京ICP证030173号”.

Google quickly resolved the licensing issue in 2007 by forming a joint venture with a local company.

Google China and Ganji.com formed a joint venture company, Beijing Guxiang Information Technology Co., Ltd., with Google and Ganji.com each holding half of the shares. They obtained the ICP license through Guxiang.

Why set up a new joint venture to obtain a license?

According to the "Regulations on the Administration of Foreign-Invested Telecommunications Enterprises" implemented in 2002, foreign Internet companies entering China should adopt a joint venture model. Foreign investors like Google may not invest more than 50% of the capital in the enterprise.

Therefore, Google China obtained the ICP license in a roundabout way. The validity period of Google's license is 5 years, and it will expire in 2012. So, what will happen next?

I found that Google China still has some services available. If you search for Google's "Translate" and "Maps" websites in China, they can be opened successfully.

Youliaojun specifically checked the ICP filing information of the Ministry of Industry and Information Technology and found that the new license of Beijing Guxiang Information Technology Co., Ltd. was approved on April 1, 2013, namely "Beijing ICP No. 13004732".

This is how Google should return to China

Based on this speculation, Gu Xiang should now hold the ICP operating license for google.cn, which may pave the way for Google's return to the mainland market.

In addition, if Google wants to return to China, Apple’s experience may be worth learning from.

Apple agreed in January to allow Chinese government agencies to conduct "security audits" of its products to ensure that it does not share user data with the U.S. government. Although Apple's hardware products are manufactured in China, the software and hardware of its products are designed in the United States, which has led to government concerns that these products may secretly steal information about Chinese citizens.

What happens when Google returns?

The general view may be that if Google returns to China, Baidu will be the victim.

However, Baidu, which has been deeply involved in the domestic search market, has maintained a relatively stable and dominant market share. If Google returns, it will hardly pose a threat to it. Instead, companies such as 360 and Sogou should worry that their market share may be further compressed.

So what will ordinary users choose? In fact, Google still has a group of fans in China. They liked to use Google before Google withdrew from the mainland, and they believed that Google search was more accurate and efficient. My colleague Yan Jun is one of them. However, this group of people is a minority. If Google Search wants to gain a larger market share, it must capture the hearts of the masses.

If Google starts with the app market and opens up a gap to return to China, it will face challenges from the Big Three.

Since 2014, the domestic application distribution market has been dominated by Baidu, 360 and Tencent, which together account for more than 80% of the overall market share. It is not easy for Google to snatch food from the tiger's mouth.

In addition, system platform manufacturers should also be careful. The Android operating system is a trump card in Google's hand. In order to provide a relatively consistent software experience on terminals, Google is also tightening its control over Android. If it enters China, the domestic "de-Googled" Android operating system may face risks.