Town Square For The Global Village Of Tomorrow Marketing Essay

“The Internet is becoming the town square for the global village of tomorrow”.  Bill Gates

Since the invention of the internet, people’s hunger for knowledge has been satisfied with the use of search tools which provide most of the times useful and reliable information that clarifies and answers their doubts.

According to Data Monitor 2010, with around 336,525,748 users, China has become the largest internet population in the world; this has made it the most attractive nation for this market. The increasing need for search tools in the Chinese market has motivated big companies, such as Google, to obtain a share of this market.

This research aims to present evidence to support the idea that University students in China are reluctant to change their preference to Google search engine, since Baidu offers the information necessary to fulfill their academic tasks.

The increasing need for search tools

The battle of information in China

China is an emerging giant that has become the biggest market for search tools; this is why every multinational corporation is trying to figure out how to get a portion of the market.

The entrance to this market is not as simple as it sounds; China is not only the biggest market for search engines but it is also one of the most complex. Companies should realize that competition is a principal factor to be analyzed, Chinese market is already filled with different search engines that offer what Chinese users need.

It is also important to realize that while China has tremendous potential for this type of business, the Chinese government keeps tight control on the information publicized to its citizens. This is why companies supported by the government have succeeded the most.

The importance of Baidu in the Chinese market

Baidu is a Chinese language internet search provider that was created on 2000 in the Cayman Islands. Its main function is to provide a Chinese language search tool that can be a viable platform for companies to get to their potential customers. (Baidu Inc.)

Since its establishment in China in 2005 Baidu has become a global competitor as a search engine that offers a variety of products such as Web search, news, MP3 search, video search, etc. All of these products meet the objective of providing the most complete information in Chinese language to the huge number of users in this country. 

Baidu has become the main competitor with the largest portion of the Chinese market. According to the International Business Times, Baidu currently holds 70.8 percent of the market share of China. It is the number 1 search engine in China.

Google’s introduction in China

In 2005 Google established a headquarters in China, trying to get a bigger share of this fast growing market that has become the largest one in the world.

Google established a strategy with the idea that they would take a long term focus: “China has 5000 years of history and Google has 5000 years of patience”. (Eric Schmidt, CEO)

Google’s started by getting to know the market, they learned about their strengths with their international experience, but also about their weaknesses in regards to their competition in China.

In January of 2010 Google was involved in a controversial dispute with the Chinese government; Google claimed that different Gmail accounts that belonged to Chinese human rights activists had been hacked, directly affecting its reputation as a secure and reliable site.

Google decided to leave China and established its offices in Hong Kong. But nowadays after several searches redirected to Google in Hong Kong have been blocked, Google is struggling to restore its place in the market.

Chinese market possibilities for Google

2.1 Market allocation for search engines

China’s modern society has developed in recent years a new need for connection that has been enabled and inspired by Internet. This has directly affected the use that the Chinese users give to the search tools.

Electronic information search in China recorded a growth of 53.2 percent worth 389.6 million dollars in the second quarter of 2010 (China daily).With this numbers it is no surprise that more companies want to gain a portion of the market, even though it is becoming very crowded.

It is important to mention that most of the Chinese market is composed of new users, making them the main objective for the companies.

2.2 Principal browsers used for academic information in China

In 1993 Chinese government introduced the China Education and Research Network (CERNET) with the goal of improving the quality of information in the education and research (CERNET, 2006; Li, 2003). Its objective is to establish a network infrastructure by offering data transmission services using updated technological techniques. (Ezendu Ariwa & Rui Li).

There are a variety of search tools provided by Chinese universities and schools; for example æ-¥æœˆå…‰åŽBBS is a website that provides plenty of academic information and students’ comments regarding academic topics, and this website belongs to Fudan University.

The use of search tools for academic purposes is still growing. According to a survey posted by China Polling, 89.10% of the interviewed are using search tools to search for school or work materials. This market has become a target for most search engines, such as Google.

2.3 Google’s background in China

Before choosing to open Google.cn, Google had already a presence in the Chinese market, but in 2002 Chinese government censored the access to the users in China, making it slow and unsatisfactory. This became one of the reasons Google decided to launch Google.cn.

Google may be the best in the US and in most of the countries but this did not guarantee the same success in the Chinese market.

One of the main mistakes of Google was taking for granted one place where new users often learn to use internet, the Internet cafes. When they saw that everybody was playing games and listening to music, they discarded the possibility that this was their niche, but what they didn’t realize, until later, was that in smaller cities most of the kids learned to use the internet in there.

According to Kai-Fu Lee, Vice-president of Engineering at Google, the number of new users in China is huge and still growing; there is a 30 to 40% per year growth.

Pros and Cons for Google in China

3.1 Google’s positioning in China’s market

China has the world’s largest internet population, so it can be assumed that most of the big international companies want to obtain a place in the market, and Google is not an exception.

Over the last 6 years Google has sought for ways to become in China what it is in most countries, they entered the Chinese market late and when they joined a lot of companies had already failed, although they used their experience and learned from their mistakes.

One of the main challenges for Google was the language. There are about 5000 characters in Chinese language so to make a search inquiry the characters provided have to be exact to get the right meaning of the word. And although there has been an improvement in the English skills of Chinese users, it still isn’t enough for most of the users to enjoy most of the search’s contents.

One of the biggest problems for Google was that most of their competitors, such as Baidu, offered free music for download; this was a major problem for them, mainly because of legal restrictions. But Google found a way to face this problem by paying for the advertising and sharing the revenues with the provider of the music, so that their users can download music for free in a legal way.

Google has also sought for ways to demonstrate its sincere compromise, care and social responsibility for China; some examples are: the free SMS holiday greeting and also the site Google offered just 24 hours after a big earthquake, to help people find their loved ones.

Nowadays according to IBT times, Google has a market share of 27.3 percent, which in comparison to the 70.8 percentage of Baidu is still pretty low.

3.2 Google vs. Baidu (fortalezas y debilidades)

Baidu is a very powerful search engine that has the biggest market share in China; Google is very powerful too but is seeking for ways to gain a bigger share of this market. Both of these companies have strengths and weaknesses and in order to fully understand the future of Google in China we have to compare them.

First, Baidu is a Chinese company whose success is mainly due to the fact that it has the support of the Chinese government and also because of the strong preference in Chinese users towards what is perceived as a true Chinese search experience; Baidu’s marketing message focuses in just that, they know the Chinese market better because they are a Chinese company.

On the other hand Google’s was one of the strongest too but now, with its operations located in Hong Kong, the market gain they had in the last couple of years it’s slowly slipping away.

It is important to compare the preferences of the Chinese users. According to a survey posted by China Polling the main reasons for Baidu users to use Baidu were: 42.47% because it has become a habit and in second place with a 27.40% was because it is convenient. In contrast, Google’s users’ reasons to use Google were: 50% said because it had rich information and another reason was because it was more accurate with a 27.27%.

By analyzing the results between the two of them we can conclude that an important strength of Baidu is that they were the first ones to present a search engine that provided the information users needed, giving them an advantage over the other companies.

On the other hand if we analyze Google’s users’ answers, we can conclude that Google is much stronger in terms of quality of information, this is one of the main strengths of the global search leader and one of the reasons Chinese netizens use it.

Another point that is very important to mention when comparing these two search engines is the Chinese government’s involvement. “Baidu is willing to do whatever the government wants, to play by the rules. That’s to Baidu’s benefit,” says Jason Helfstein, an analyst at Oppenheimer in New York. “Google is trying to do things that they think are the right thing to do, even if it has negative business implications.”

It is said that Baidu’s influence on the Chinese government has created some advantage for the company. In contrast, the main barrier for the entrance of Google to China has been the limitation of information imposed by the Chinese government.

3.3 University student’s preferences towards other search engines

For the purpose of this research a survey was conducted to identify the main preferences of University students towards search engines .It was directed to 50 Chinese students from Fudan University, Campus Shanghai, in order to truly understand the preference of the Chinese youth towards a specific search engine.

The first question was: Which is your favorite search tool? In which 60% of the interviewed said Google, followed by Baidu with 36%, and Sogou and Sina with 2% respectively. Although the sample of this survey is small the results prove that there still are people in the Chinese market that prefer Google over Baidu.

A survey powered by China Polling and directed to 1515 Chinese citizens, shows that actually with a bigger sample the results of Baidu and Google are actually reversed. In this survey the results show that 75.61% prefer Baidu as their main search engine and Google in the second place but with only a 21.95%. Still we can observe even though Google is operating from Hong Kong a share of the market is still using it as their principal search tool.

Another question addressed in the survey directed for this study was: Why is it your favorite? In which 53% of the interviewed answered because it’s convenient, the next 21% answered because it offered complete information, followed by an 18% that said it was their favorite because it is faster.

When asking them about what would be the reasoning for them to change their search tool, the most common answer with a 38% was that the site could give them more information about China.

Conclusion:

University students in China are reluctant to change their preference to Google search engine, since Baidu offers the information necessary to fulfill their academic tasks.

With the information presented, mainly in the results of the survey, we can conclude that university students, because of their superior international vision, are prone to using search engines that provide more information with higher quality. This superior international vision is due to the fact that they are enrolled in one of the best universities in the country, and according to the results we can conclude that for them Google is the best option.

Google’s place in China is in jeopardy, although it has constantly tried to maintain its place in the Chinese market and it has a big share of it, the fact that currently its operations are not in Mainland China has affected strongly its position. And the restriction over the information provided has also made Google’s journey through China a bit rough.

Baidu on the other hand, has managed to maintain and increase its market by developing new technological tools that provide what Chinese users need, and with the support of the government and its self-censored process, we can expect that Baidu will stay first place in the long run and will keep up growing.

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