Google Still Has Uphill Climb In Growing Chinese Market

Google still struggles with lower user awareness in China. And among those who are familiar with the search engine, it is considered by many to be a "foreign service" not suitable for Chinese-oriented searches, according to consulting firm Pearl Research.

Based on interviews with the Chinese youth demographic, Chinese search engine Baidu is far preferred to Google, according to Pearl Research in the report: "Baidu vs. Google: A Study of Search Engine Preferences among Chinese Youth."

"Baidu's lead is mostly a result of its Chinese brand, early market entry, strong entertainment functions and other youth-friendly features," said Allison Luong, managing director of Pearl Research. "However, many of our panel believed that Google offers a robust product with more relevant and precise search results."

China is an important market for Google and other U.S. Internet companies with its steadily growing number of users. Chinese government Internet research agency CNNIC said Thursday that China now has 163 million broadband users and 50.4 million mobile Internet users. Although China now has the second-largest Internet population behind the U.S., its Internet penetration rate of 16% is still below the global average of 19.1%.

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The Pew research group says the growth in Chinese users is outpacing growth in the U.S., and China is projected to overtake the U.S. in the total number of users within a few years. China's Internet population grew by 18% in 2004 and 2005, and 23% in 2006.

According to CNNIC, entertainment is now the top reason for Chinese users to go online, with 181 million Internet users accessing music online.

Baidu's strong multimedia entertainment search bolsters its popularity, according to Pearl Research. Compared to Google, those interviewed indicated that it is more convenient to locate multimedia content such as MP3 downloads on Baidu. The strong entertainment search function is one of the key factors in Baidu's popularity over Google, with more than 60% of the survey respondents listing music downloads as their main reason to go online.

Overall, Baidu is a more recognizable name than Google. Baidu's earlier entry into the Chinese search engine market, and higher visibility via partnerships and software add-ons, has made it a challenge for Google to gain users despite a number of brand-localizing strategies.

On the other hand, Pearl Research believes Google's robust search capability enhances its ability to retain users better than Baidu. Google users showed strong loyalty to the search engine, commenting on the depth and precision of the results returned. Some of those interviewed by Pearl had switched to Google after unsatisfactory results from Baidu.

The study is part of Pearl Research's Phoenix Generation series of report on Chinese youth. The exclusive study is based on Chinese consumer insight gleaned from 40 one-on-one interviews and a 450-person survey. Based in San Francisco and China, Pearl Research is a business intelligence and consulting firm specializing in the Internet and digital entertainment market with a special focus on emerging markets and platforms.

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