China search market review: ‘Slow’ Google hampers growth in mobile dominated market

The research forms the first in a series of International Search Reviews from search marketing firm Reform Digital, aimed at giving insights into the key search markets around the world. 

Key findings from the report are:

·         Web audience: 360,000,000 Chinese Internet users as of Sept, 09, but only a 25% estimated broadband penetration.

·         Mobile audience: China has more mobile search users than any other international market (in fact they have more mobile broadband users than regular broadband users.) Mobile Internet users in the country reached 192 million by the end of September 2009, an increase of 62.7 percent year on year. Mobile internet and broadband users are key for Google, as they fare much better in these categories. 

·         Market share: Baidu 76% / Google 20% / Yahoo & Bing 1% (Comscore – July 2009). Baidu is the leading search engine, but its largely because of convenience (Google is slow, and many people still don’t have broadband for instance).

·         Ad revenues: Interestingly, Business Week cited that Google had 22% of the searches in China, but 33% of the search revenue, suggesting a stronger business model than Baidu, regardless of lower market share. As a result, Baidu is pushing their new PPC platform (Phoenix Nest), which has more of a Google Adwords-style bidding model. 

·         Market trends: Search marketing is becoming more ‘westernised’ in China and 2009 was a year of significant developments in the Chinese search market

·         Search Engine Optimisation: Until 2009, SEO was about paid placements and cost per click. Buying "paid placements" in natural results are what many companies in China consider as SEO.  ‘Westernised’ SEO practices will start to evolve in 2010.

·         Social networking: Facebook is the 17th most popular service, with only 1.5 million users compared to almost 400 million for QQ.com.  While Twitter is another no-show in China, as it simply can't be accessed by users.

·         Data reliability: Statistical market information released in China can be somewhat unreliable and manipulated

·         Opportunities: Sites based in China have a huge advantage when it comes to competing here. Search isn’t as level a playing field as it may be in other markets.

A short summary of the search review paper can be seen here.

To download the full report for free click here. 

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