TMTpost: Will Google’s Return Have An Impact On The Chinese Market?

Google will only change the Chinese market a little bit, but it can never overturn the market.

Google has had a rocky relationship with the Chinese cyber security authorities since January 13th 2010, when the company announced that it might censor searches in China and pull out of the country completely due to a “sophisticated and targeted” cyber-attack. However, Google’s toughness led it nowhere, so it had no choice but to shut down its operation in mainland China.

However, it is not so much Google left China as the Chinese Internet market discarded Google.

After Google left China, the Chinese Internet industry roared. Five years later, Google seemed to be looking for opportunities to return to Chinese market. Since 2014, rumor has it that Google is going to launch Google Play in China. Rumor continues to spread in 2015 that Google is going to return to the Chinese market soon.

Nevertheless, Google hasn’t officially returned to the Chinese market yet, as did the wolf for the first two times in a well-known Chinese fable “Here Comes A Wolf”. However, will Google finally come as did the wolf in the fable?

Rumors

Recently, another rumor makes the headline, saying that Google will launch Google Play as the first step to return to the Chinese market. According to The Information and Business Insider, Google is planning to launch an optimized version of its Google Play app store and Android Wear software in China. Reportedly, Google will fully obey relative regulations in China and provide no online book or movie to Chinese users. Moreover, Google plans to first attract as many Chinese users as possible to Google Wear with apps developed by Chinese developers and then promote in large scale Google Play to Chinese users.

As a matter of fact, such rumor has spread a lot in the first half of 2015.

This April, some citizens found that Google registered a series of domain names including words such as “china” and “cn”, such as:

googleplaychina.com/.cn/.com.cn
googleplaychinaedition.com
googlechinaaccount.com
googlechinaedition.com

However, Google also registered 18 domain names, including Google.cn, adsense.cn, nexus.cn, etc. in 2012, but nothing really happened later on.

Moreover, Android Police found an icon combing Google Play’s logo and the five-starred red flag when they were hacking Google Play.apk this May before this year’s Google I/O. Google’s spokesperson admitted that Google was indeed willing to return to the Chinese market, but denied that there was such an icon.

However, after Huawei announced that it would become the contract manufacturer of Google Nexus and Lenovo unveiled Moto 360 after acquiring Motorola from Google, it seems that Google is indeed going to return to the Chinese market in the near future.

Up till now, the most trustworthy “rumor” comes from Geekpark, which revealed that an official from Google Play Overseas Expansion Division told Geekpark that Google Play was soon going to be available to Chinese users. Google hasn’t confirmed this rumor yet, so we might have to wait until this October for any official announcement.

The loss

Looking back, Google’s decision to leave the Chinese market five years ago might not be a wise one.

Although many people thought that Google left China because it didn’t want to compromise its liberal values, I don’t think so. Now that Apple and Microsoft can provide services in the Chinese market, why can’t Google? Besides that, Google lost a huge sum of money after leaving the Chinese market.

For one thing, Google gave up the huge amount of advertising income. According to eMarketer’s estimates, Chinese advertisers are going to spend 14.9 billion dollars in total in advertising on major search engines in 2015. If Google had posted 10% of these advertisements, Google would have profited by 1.4 billion dollars.

For another, Google failed to make profit out of its Android system. Although Android is the dominating smart phone system in China, most smart phone makers revise it a lot: replacing Google’s apps and services with those developed by themselves and other third-party developers. It’s quite ironic that Google failed to make profit out of something it created.

Google is finally going to come back?

Now that Google has teamed up with Nexus to develop its next generation Nexus, we can say almost for sure that Google is going to return to the Chinese market. Nexus has always been the apple in the eyes of Google. Nexus, with better performance, newest Google services and a low price, have always been leading global smart phone industry.

This is the first time for Google to team up with a smart phone maker based in mainland China to develop its next generation Nexus. Previously, Google also worked with HTC, Samsung and LG, etc. The interesting thing is that Huawei actually has a pretty close relationship with high-level Chinese officials. What might their cooperation indicate?

Personally, I believe their cooperation have at least two indications: one in practical terms and another from strategic perspectives. On the one hand, by cooperating with Huawei, Google is going to not only develop high-quality next generation Nexus, but also show its willingness to cooperate with the Chinese government. On the other hand, American government has always been banning Huawei’s operation in the US, so Huawei is actually extending an olive branch to the American government by cooperating with Google.

If Google were to release next generation model of Nexus to the Chinese market, Huawei would be a great partner to promote the phone model. Huawei might even help Google get the permission to launch Google Play in China.

To wrap up, all clues seem to suggest that Google is indeed going to return to the Chinese market.

Will Google’s return have an impact on the Chinese market?

Of course, Google’s return will pose threats to its Chinese counterparts. However, Google is no longer the potent Google five years ago, the Chinese government is also not what it was five years ago. It is probable that Google will find at last the Chinese market has already changed a great deal. The inconvenient fact is that Google Play, Android Wear and Nexus are far from enough for Google to play a role in the Chinese market.

Five years ago, when Baidu, Alibaba and Tencent were only beginning to rise and today’s emerging giants such as Xiaomi, JD, MeiTuan hadn’t been established yet, Google might have play a key role in Chinese Internet market. Five years later, BAT have already been dominating the Chinese Internet industry, Google is facing fierce competition from Baidu in search engine sector, Tencent in social networking sector, Baidu Appstore and Xiao Appstore in Appstore sector. Moreover, while Android Wear is going to be suppressed a lot by Apple Watch, Nexus isn’t going to be too popular in Chinese smart phone market either.

In conclusion, Google will only change the Chinese market a little bit, but it can never overturn the market, since the Chinese market has already been full-developed, and Google has already lost the golden opportunity during the past five years.

[The article is published and edited with authorization from the author @Wu Junyu, please note source and hyperlink when reproduce.]

Translated by Levin Feng (Senior Translator at ECHO), working for TMTpost.

(Chinese Version)


Originally published at www.tmtpost.com.

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