Behind the rumors of Google entering China: the market structure has been determined or it may not adapt to the local environment

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"Is Google Play really going to enter China this time?" A Google app developer recently asked this question on a forum. In the past two to three years, similar questions have always been circulated among domestic Android developers, who are very concerned about any news about "Google Play entering China".

Among all the rumors, the term "customized version" of Google Play has been interpreted in various versions since last year. At that time, Google Play product manager Ellie Powers wrote on Google's blackboard that China's participation is part of the continuous improvement of Google Play. Overseas media also reported that Chinese mobile phone manufacturers such as ZTE and Huawei have become important partners of Google. But after several months, this news is still just a rumor.

"This time it seems to be true." The aforementioned Google developer told Tencent Technology, "Google will hold a press conference in China on September 24, and a person in charge of a mobile phone manufacturer revealed that Google had contacted them several months ago to discuss cooperation matters."

According to Tencent Technology, Google did hold an event called "Think Mobile with Google" on September 24. However, a document obtained by Tencent Technology shows that the theme of this conference is related to Google's advertising products, and it is not a press conference for Google Play to enter the Chinese mainland market.

"The App Store will be the first step for Google to return to the Chinese mainland market." Feng Fei, organizer of the Shanghai Google Developer Community, told Tencent Technology that in her opinion, Google's entry into China is an inevitable trend.

In the past two years, China's smartphone market has grown rapidly and has replaced the United States as the world's largest market. Such a market size is difficult for Google to ignore, especially when Android occupies the vast majority of the Chinese smartphone market and Google has little benefit.

Earlier, there were reports that Google has been lobbying Chinese smartphone manufacturers to add a link to the Google Play Store in their phones and is willing to provide a subsidy of about $1 for each phone.

Google has launched a Chinese version of Android Wear for the new generation of MOTO 360 smartwatches for the domestic market. For example, Sogou Maps replaces Google Maps, and Mobvoi replaces Google Now. Google Maps and other apps are currently unavailable in China, but Google has found alternatives.

Google has not commented on whether Google Play will enter the Chinese market in the near future.
Starting from zero: Google Play has limited appeal

It seems that a series of related events are a prelude to Google's return and acceleration in the Chinese mainland market.

However, most of the industry insiders interviewed told Tencent Technology that if Google Play is launched in mainland China, the market will not be greatly affected. If it had entered the mainland China market two or three years ago, the market environment would have been better than it is now. A third-party app store manager said that at this stage, Google is just another ordinary competitor to other practitioners.

From Google's perspective, the development of Google Play in the past two years has mainly focused on commercialization, and the iteration of the product itself has not changed much in terms of functionality. Although the Chinese mainland market will be an opportunity to expand revenue, third-party app stores in the Chinese market have made a lot of optimizations in how to guide users to find the apps they need, and Google may not be more attractive in terms of functionality.

Secondly, Google was also very hesitant about whether to enter the Chinese mainland market, and the specific strategy was not clear. An industry insider told Tencent Technology that due to the frequent changes in relevant persons in charge, it was not very clear why it wanted to enter China and what the advantages were.

The most typical problem is the solution of application payment. Whether Chinese users who are used to free Android applications can accept payment and whether Google's own payment system can enter the Chinese market are both unresolved issues.

When it comes to the Chinese mainland market, Google also needs to attract users and acquire traffic, which is currently almost equivalent to starting from zero.

Of course, for many developers, the main focus of evaluating whether an app store is worth investing resources is on size and rules. "Adding one more market means sending one more installation package, which is not costly, and developers will definitely upload an installation package." A developer told Tencent Technology, "If Google Play is large enough and the competition rules are fair enough, it will attract more attention from developers."
Unfavorable local conditions: The market structure has been determined

Unlike overseas markets where Google Play dominates the market, in the Chinese mainland market where Google is absent, Android app distribution channels have always been a battleground for giants. In recent years, the growth of smartphones has slowed down, the demographic dividend of mobile Internet has gradually disappeared, and major players have completed their scramble for territory.

Analysts generally believe that the pattern of Internet giants dominating the market has been formed. Data from third-party analysis agency iResearch shows that Tencent App Store, Baidu Mobile Assistant and 360 Mobile Assistant have locked up more than 70% of the market share, while the rest is divided up by mobile phone manufacturers' app stores such as Xiaomi and smaller third-party app stores and distribution platforms.

"Affected by the rise of mobile phone manufacturers, the application distribution share of third-party companies such as 360 and Baidu will drop by more than 20% year-on-year in 2015," said Yu Yongfu, president of Alibaba Mobile Business Group, in a public speech recently.

Compared with third-party app stores, mobile phone manufacturers can deeply integrate their products with the system. In the Chinese mainland market, where Google has little influence, it is difficult for it to require manufacturers to meet its commercial needs for open source Android. In other words, Chinese manufacturers can deeply integrate applications with the system, thereby providing features such as "second installation" to reduce the user's installation process.

In addition, game developers and other developers with special hardware requirements also prefer to cooperate with mobile phone manufacturers. On the one hand, it can save the time of adapting the models and thus launch the products earlier; on the other hand, it can reach a wider range of potential users. Mobile phone manufacturers have solved the sense of separation between users and the app stores themselves.

Google's approach is still to use the operating system as the basis to drive the advancement of its product portfolio. Unless Google requires it through relevant agreements, it will be difficult for Chinese mobile phone manufacturers who have launched their own optimized operating systems to vigorously promote native Android.
Finding diverse ways to survive

"For Google, the competition with its Chinese counterparts is not a showdown in terms of user size, but more of a competition in terms of model. The key is what new gameplay Google will bring to the market," Zhang Bo, general manager of PP Assistant, told Tencent Technology.

In fact, when users download commonly used applications such as WeChat, they no longer care about the channels through which they obtain them, so mobile phone manufacturers have an advantage. Wang Junyu, CEO of Wandoujia, said that market competition has shifted, and downloads with no commercial value will be taken away by competitors, but helping users find less popular applications will be a new opportunity.

For app stores that cannot control the entrance to mobile terminals, they are bound to have a head-to-head battle with mobile phone manufacturers, and the former has the advantage of better understanding user needs. "Developers need our traffic, so there is an opportunity to cooperate together," said the head of an app store, "commercial behavior will allow both parties to quickly find a suitable win-win way to cooperate."

In 2014, Wandoujia formed a team in Shenzhen to serve mobile phone manufacturers. This team helped the latter build app stores and provided them with technology and content sources. There are usually two cooperation models: one is to provide data and search services to mobile phone manufacturers. When users search for keywords in the latter's app store, they access Wandoujia's server. A typical example of this cooperation is Meizu; the other is to package the entire client, put the brand of the mobile phone manufacturer on it, and the mobile phone manufacturer will complete the subsequent operation.

It is difficult for Google to provide such localized services in the Chinese mainland market. The aforementioned app store manager even believes that Google Play's entry into the market as a competitor may even lead to intensified cooperation between Chinese mobile phone manufacturers and third-party app stores. He told Tencent Technology that some mobile phone manufacturers have already started negotiating cooperation with it.

However, the official said that if Google enters the market with a partner mentality and together with local service providers, there may still be opportunities.

In the MOTO 360 2nd generation smartwatch launched for the Chinese mainland market, Google gave up core businesses such as voice search and maps, and handed over the app store to Lenovo. This may be the best lesson it learned in China.