I’m pleased to present a great guest post written by James, author of lifesperspective business blog. In this article he discusses the rise of China in the context of Internet marketing and the impact China is having on the global search engine industry.

Does the word ‘baidu’ ring a bell to you? Don’t be surprised if it does not, but it sure rings a familiar bell to about 90 million users in China based on a report by Search Engine Land. That represents just 60% of the current internet users in China. Yes, Baidu is a search engine and a highly influential one at that.

In its report, it mentions that China is the second largest online market just barely behind the US at 150 million and 154 million respectively. But consider this, the 150 million internet users of China is a mere 10% of the total population of China! Take a minute to digest that fact.

So why is Baidu so popular in China? Several reasons have been offered, but myself being Chinese, I know that I was first introduced to it as a source of *gasp*, do I dare say this? Yes, mp3 downloads. I should probably protect myself against a flaming wall of arrows by saying that those were my younger innocent days, when internet piracy was not such a huge issue yet. Hope that is enough to cool down the flames. But anyway, back to our topic, Baidu was basically founded upon the authority for looking and downloading of mp3 files. That is where its reputation spread like wildfire across China and Asia. The fact that it was started by a local Chinese firm and was in Chinese further accelerated the pace and at the same time, kind of shielded it off from the prying eyes of the west.

Nevertheless, the old Baidu is long-gone and the new improved version is a far-cry from what it used to be. Now, it is China’s top search engine, almost like a Google to the West even though Google has made its foray into the Chinese market. Based on a recent report by CNN, many Chinese internet stocks have far outperformed the big boys of Google and Yahoo!. Not surprisingly, Baidu is one of them. Another firm is Sina, China’s largest internet portal. With the current breakneck development and growth of the Chinese economy, this trend looks set to continue.I believe that one of the strongest factors playing for these Chinese firms is language. While more Chinese are getting fluent in English, it is still a far second to the Chinese language and thus the websites. Thus all the Chinese online companies can continue to bask in the monopoly of the Chinese market at least in the near future. According to Search Engine Land, the search algorithms of Baidu are inferior to that of Google, due to the different browsing styles of Chinese, but does it really matter if you don’t quite understand the alternative?

For sure, the Chinese are quite comfortable with what they have now and firms like Baidu and Sina have become a household name to at least 90 million internet users. Assuredly, as more Chinese come online, these firms will continue to suck up the demand and the advertising dollars that come from it. Currently, US is estimated to have a 60% internet penetration rate, representing 150 million users. Conservatively, if China grows to a mere 30% penetration rate, it will mean more than 220 million Chinese users with Chinese internet firms taking a lion’s share of the market. This is not hard to envision at the rate that internet usage is growing as seen from my previous post about the growth and saturation of the internet. .Should Google be worried? It should start sweating.

Going forward, Chinese consumers and businesses will slowly enter the English online market. It is a slow but sure thing. Do you think it will happen the other way round? I doubt it. The likely scenario is for the English firms to start buying over Chinese internet firms and hiring locals to penetrate the market. But they had better start doing it fast and bite the bullet before it becomes too difficult to dislodge the strangle hold of these Chinese firms over the burgeoning and almost infinite Chinese market.

So will the Chinese rule the world? It’s not a decided fate yet, but based on their size alone, it’s enough to make anyone both salivate and tremble.

This entry was posted on Thursday, June 28th, 2007 at 1:05 pm and is filed under Uncategorized. Responses are currently closed, but you can trackback from your own site.

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