Google has returned to China with its head down. Can it pay the price for its past willfulness?

Google has returned to China with its head down. Can it pay the price for its past willfulness?

Recently, there is news that Google has made a promise to China that the special version of Google Play will provide application downloads for the Chinese market under the review of the Chinese government and prevent Google Play from publishing some applications that the government considers inappropriate. At the same time, as a condition for entering the country, Google Play's data storage server will also be set up in China.

This shows Google's determination and attitude to return to the mainland market and its readiness to build good corporate and government relations. Although Google has not officially announced it, it is basically a foregone conclusion that it will enter China step by step with Google Play as the entry point.

China's Internet market has always been a fully competitive market. Under the leadership of BAT, it has now formed a "three super and many strong" situation, each of which has a strong foundation that is difficult to shake. Even though Google is an international Internet giant, if it wants to re-deploy its business in China on a large scale, it will also face competition from local giants.

In the five years since Google left, China's Internet has developed rapidly. Especially after entering the mobile Internet era, the gap between China and the United States in Internet development has further narrowed, and the situation is very different from when Google left. Overall, even if Google's various businesses return to China, it will be very difficult to regain market share.

1. The domestic application market structure has been determined. Can Google Play, which lacks fighting spirit, make a breakthrough?

Google Play is the entry point for Google to return to China. Among Google's many services, Google Play involves application distribution scenarios, which is relatively the least sensitive information-related business and is relatively simple to review. Moreover, the application market is the underlying entrance to the mobile Internet. If Google can gain some market share in this field, it will play a big role in subsequent business deployment.

Google Play is undoubtedly the leader in foreign markets and the origin of the Android system, but its biggest problem is that it has no experience in competing in complex environments, and its team's main task is to improve and maintain the Android system ecosystem.

On the contrary, China's local third-party application market is highly fragmented. Currently, the market is divided among the three giants Baidu, Tencent, and 360, and this is a situation that has only been formed after countless second-tier players have been eliminated. After two years of reshuffling, this market is no longer a game that small manufacturers can afford to play. Even Wandoujia disappeared after raising US$100 million from SoftBank.

In the past few years of rapid development in the melee of China's third-party Android market, Google Play has relied on the Android system to dominate the overseas market. It has never shown its face or fought a battle. This is a fatal problem in the complex Chinese Internet environment.

In addition to Internet giants, mobile phone manufacturers are also not idle. Xiaomi, Meizu and other manufacturers are trying to take back the initiative of the app store from third-party application platforms. This is a very important entry point. On the one hand, it is a good source of income, and on the other hand, it can take advantage of the opportunity to develop its own ecosystem, including cloud, payment, system, etc. Although Google is willing to pay mobile phone manufacturers to build Google Play into their phones, how many are really willing to cooperate with Google?

In addition, there is the resource aspect. In overseas markets, Google Play also distributes important content such as movies, music, and books, but this part of the business is more complicated to enter China. First, there will be many copyright issues, and second, the difficulty of review will increase. So in terms of resources, Google Play does not have an advantage.

Can Google Play stand out among these manufacturers? The team leader thinks there is a big question mark.

2. The search market is tough to crack: the pattern was initially determined five years ago.

Google's core business is search, and its leading position in the global search market is obvious, but the situation in the Chinese market is also different. Currently, Baidu has formed a dominant position in the Chinese search market, and even when Google leaves the Chinese market, its market share is relatively marginal.

In 2010, the entire Chinese search market grew rapidly. According to data from Analysys International at the time, in the third and fourth quarters of 2010, Baidu had a market share of about 75% in the domestic search market, while Google was hovering around 20%. In terms of revenue, Baidu accounted for nearly 60%, while Google accounted for about 30%. When Google was still active in the Chinese market, Baidu's market share was already there.

After Google withdrew from China, 360 and Sogou began to make progress in the search field, which actually took advantage of Google's withdrawal from the Chinese market. In the field of mobile search, Alibaba's Shenma Search also began to have a certain market share with UC Browser, but it was difficult to change the basic pattern of Baidu's dominance.

In terms of revenue, Google Search still has a certain share in the mainland, but it is already very marginal compared to local giants. In the third quarter, Baidu accounted for 81.1% of China's search revenue, while Google accounted for 10.2%. If overseas revenue is excluded, this proportion will drop to 3.92%.

From a technical perspective, Baidu has accumulated a lot of technical experience in Chinese search engine technology during the period when Google withdrew from China. At present, Baidu's advantages in Chinese search technology are very obvious, and it has begun to try to further expand in overseas markets.

In terms of search brand, user habits, path dependence, etc., Google has always been relatively weak. Especially among the new generation of Chinese users born after 1990, Google's brand awareness has declined significantly. Many users born after 1990 do not have as strong an "international interest" as early Internet practitioners. According to the statistical report of CRT (CCTV Market Research) in June this year, Baidu and Alibaba have become the companies that Chinese college students most want to work for, and Google ranks fourth. Chinese local Internet brands have risen. In addition, Google's fighting spirit has never been very strong. Facing a stubborn opponent like 360 ​​that relies on browsers, Google is probably at a loss.

Overall, even if Google Search overcomes the regulatory hurdle, it will not be easy for it to return to China and compete for users with major manufacturers who are deeply engaged in Chinese search.

3. No need to put Google on a pedestal

In fact, the most attractive thing about Google users may not be search. People like Google because of its "don't be evil" philosophy (although it is gradually compromising with capital now), and also because of its cutting-edge technology. Especially for domestic users, Google has been away from China for too long, and has laid out magical new gadgets such as Google Glass, driverless cars, quantum computers, and Google balloons. In the eyes of most domestic users, Google is a mysterious technology leader. This is the so-called distance creates beauty.

To some extent, the layout of black technology is also a means of marketing and market value management for Google. It is well known that Wall Street prefers the future to net profit, which to some extent supports Google's market value of 500 billion US dollars. But in fact, Google's layout of black technology has not been smooth sailing, such as the failure of Google Glass, and the trial and error of self-driving cars in many traffic accidents after years of launch, etc.

In fact, Google is not that mysterious. Even if it has laid out all kinds of black technologies that are still far away, Google is essentially still a company, and companies want to make money. At present, Google is already the world's largest advertising company. In the third quarter of this year, Google's total revenue was 18.675 billion US dollars, of which website revenue was 13.087 billion US dollars, and network revenue (Google partner websites generated through the AdSense program) was 3.694 billion US dollars. These two parts are mainly Google's advertising revenue in various fields, accounting for 89.86% of Google's total revenue. In terms of major revenue, Google's methods seem a bit single.

Five years ago, Google chose to leave China because it was unwilling to compromise, but five years later, it still wants to return to the Chinese market and resume its work in government relations. Today, more than half of the Android phones in the world come from China, but they have nothing to do with Google. It seems that Google can no longer bear it and has to bow its head and return, paying the price for its "willfulness" back then.

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