E-Commerce Global Tech

Google Rethinks China E-Commerce

Six months after abruptly shuttering its China-based e-commerce search business, global Internet titan Google is reportedly rethinking that decision with plans to re-enter the market. The decision looks like the latest acknowledgement by Google that China is simply too big to ignore, following its high profile shuttering of its China-based general search business in 2010 after a spat with Beijing over censorship. If this latest story is true, the next logical question might be whether we could see Google return to the general China search market, where competition is suddenly starting to heat up after years of dominance by market leader Baidu.

I’ll address that bigger question shortly, but for now let’s return to the more immediate news that has media reporting on Google’s plans to re-enter the China e-commerce search market. Details are rather slim, citing only an unnamed industry source saying Google is talking with several unspecified companies in preparation to relaunch its China e-commerce search engine. The reports point out that e-commerce search involves mostly product information. Such searches are much less sensitive than general search, which can often touch on sticky topics like politics that are subject to Beijing’s tough censorship rules.

The source in the reports seems to be one of Google’s potential new partners, perhaps one of the bigger names like Jingdong or Walmart’s Yihoadian. Thus it’s hard to say how accurate the reports are, since it’s always difficult to gauge what a company is doing by talking to just one or two of its business partners.

This kind of turnaround would be slightly surprising, since Google just withdrew from the China e-commerce search market in December, saying the business had failed to gain traction. That move seemed to mark the latest withdrawal from China for Google, following a similar shuttering of its China-based music search business earlier in the year.

A quick check of Google’s current China-based site shows that general Chinese-language search queries are still being directed to Hong Kong, which is where Google moved the service after its fallout with Beijing in 2010. But the site still hosts locally based photo search and mapping services. It’s also home to a new product called shihui, which roughly translates to “good value” and is in the trial phase. So clearly Google hasn’t given up on the China Internet market just yet.

What’s more, the company’s Android smartphone operating system continues to gain traction in China, providing a strong potential platform for Google’s own China-based products via the mobile Internet. China’s e-commerce search market is currently relatively small, and is dominated by eTao, a specialty site run by e-commerce leader Alibaba. But many of China’s top e-commerce sites remain wary of eTao due to its Alibaba ties, which could perhaps provide a window of opportunity for Google if it wanted to re-enter the space.

All that said, let’s return to my original bigger question, namely whether this e-commerce move, if true, could represent a first step in Google’s eventual return to the broader China search market. At this point, I would say that the company does indeed seem to be rethinking its China strategy, realizing it can hardly afford to ignore the world’s biggest Internet market.

But I also wouldn’t expect to see Google return to the broader China search market anytime soon. Instead, we may see it take smaller steps by rolling out smaller, more targeted products to see how Beijing and the market reacts. If everything goes smoothly and the new Beijing leadership takes a more tolerant stance, we could perhaps see Google return to China’s broader search market as soon as 2015.

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  • Tim Martin

    China poses a bigger e-commerce market through the world. It would be good news for both Google as well as people of China.