Snapchat Has A Lot of Chinese Swag
Snapchat re-ups partnership with Baidu even as Google and Facebook work in China.
While Google is now being accused of favoring China over the U.S. (CNBC), it’s not the only American company with ties to China. Tesla and Snapchat are also good examples.
Snapchat is a pretty hilarious example, in particular.
Two years have passed since Snap Inc. first struck a deal with Baidu that authorized China’s largest search engine to be a reseller of Snapchat ads for companies in Greater China, as well as Japan and South Korea, where Baidu runs a portfolio of mobile apps.
Snapchat Buddies up with Baidu for Asian Growth
This contract has recently been renewed. Also Tencent owns a significant stake in Snapchat. Snapchat, like many Chinese companies, fails pretty hard when it comes to global markets. So the Asian connection could help it here.
Snap has two units in China: an R&D center in Shenzhen for Spectacles and an ad office that caters to game developers, e-commerce merchants and other companies that want to reach overseas customers.
By partnering with Baidu, Snap’s ads gain exposure to the search giant’s massive advertising network, according to Yahoo Finance. It also gains Baidu’s local language support and account management services, which mirrors Facebook’s partnerships with its ad representatives.
ColdTech Wars Looks Pretty Chummy
Despite being blocked in China, like most other western social media services, Snap has shown interest in China in various capacities, including a research and development center in Shenzhen (TechCrunch) for Spectacles.
It’s also serving the country’s game developers, social apps, e-commerce merchants, travel platforms and other export-led advertisers who wish to capture the network’s 190 million daily active users around the world. Snapchat’s stock is one of the cinderella stories of 2019 so far, it is now up above $15.00, after going as low as $5 not so long ago.
It seems even at the onset of a cold tech war, American companies are partnering rather incredibly with Chinese tech firms. Snapchat also has considerable Saudi financing and bleeds money still. With massive American startups with considerable Softbank Vision Fund backing, they aren’t just “American” companies per se, they are global companies with significant backing from places like Japan and Saudi investors.
Tencent Could Acquire Snapchat One Day
Google working with the Chinese Government and Snap formalizing even strong ties with Baidu isn’t news, but many people don’t know this occurs. Google is just really really bad at keeping secrets — because their own employees don’t even agree with a lot of the things they do.
None of the western social giants can go it alone in China, which is why Snap chose Baidu to be its local partner, not only to overcome regulatory restrictions on foreign entities but also to tap the latter for language support, account management and an extensive advertiser network.
Bifurcation of the Internet Means Facebook’s Profiteering in China May be Limited
Even as Governments play trade war games, the reality is business is interconnected. You cannot black list Huawei and expect business as usual. Huawei will create its own operating system to rival Android and iOS and the bifurcation of the internet will continue.
Snapchat is a little player compared to the Duopoly, but it shows that the only way it can survive is to partner with China. Ironic, then, isn’t it?
Facebook? They also work in China. They failed to get an agreement with Baidu so Facebook is now working with Cheetah Mobile, PapayaMobile and seven other advertising representatives in China. So while the Government is doing one thing, BigTech is doing another. Typical, really.
Facebook makes a killing on Chinese business. According to Pivotal Research Group, Chinese companies spent $5 billion on Facebook ads in 2018 alone, which would account for more than half of its Asia Pacific ad sales and 9% of its top line. That’s a whole lot of playing with the enemy.
As for Snapchat, it needs Baidu just to survive with global growth in East Asia.
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