US Internet search engine company Google, a dazzling success story on Wall Street, is underperforming in China's booming search engine market, a recent survey has found.
Google's share of China's Internet search engine market is rapidly being eroded by its Chinese rival Baidu.com Inc, the quasi-government China Internet Network Information Centre (CNNIC) said Monday.
Baidu.com has managed to increase its market share by at least 10 per cent during the past six months in three major Chinese cities Beijing, Shanghai and Guangzhou which account for the vast majority of China's Internet population, the survey by CNNIC showed.
"Google is losing to Baidu.com though the number of Chinese users of Google remains largely unchanged," said Lu Weigang, a well-known Internet analyst who headed the CNNIC survey.
Baidu.com, which was listed in NASDAQ earlier this month, is now ahead of Google in all the three cities in terms of market share.
Only six months ago, Google was the most frequently used search engine for Internet users in Shanghai.
CNNIC's survey found Baidu has a 43.9 per cent market share in Shanghai compared to 38.2 per cent for Google.
In Guangzhou, Google has only a 28.7 per cent market share while Baidu holds 48 per cent. In Beijing, Baidu increased its share by 10.8 percentage points to 51.5 per cent while Google's share grew only by 1.9 percentage points to reach 32.9 per cent.
The survey also found Chinese Internet portals Sina Corp and Sohu.com, which are also listed on the NASDAQ, and US Internet giant Yahoo! are all losing share in China's fast-growing Internet search engine market.
Chinese firm 3721.com, which was bought by Yahoo!, also shed its market share by 1.8 percentage points in the past six months.
The rapidly-changing landscape underlines the increasingly-intense competition in the world's second-largest Internet market by the number of users.
China's Internet population hit 103 million by June, second only to the United States, indicate statistics by CNNIC.
Search engines have become indispensable for Chinese Internet users: for instance, 54.5 per cent of web surfers in Beijing frequently use search engines each day, CNNIC's survey found. More than 80 per cent of Beijing Internet users use a search engine at least once each week.
Last year, the size of China's search engine market hit 700 million yuan (US$86.4 million), compared to 100 million yuan (US$12.3 million) in 2002, according to Beijing-based research house Analysys International.
Analysys forecast the market size could reach 3 billion yuan (US$370 million) by 2007.
Local web portals such as Sina Corp and Sohu.com have launched their own independent search engines in the past few years.
Microsoft's MSN division is also expected to launch the Chinese version of its search engine soon in China.
Google had long adopted a "wait-and-see" attitude towards the Chinese market before it formally entered the country in July.
Before that, it had no formal operations in China although it was a major Internet search tool for many Chinese Internet users.
Inadequate localization has resulted in a low brand awareness of Google among Chinese Internet users, which put it at a disadvantageous position compared to Baidu.com, said Lu.
Interestingly, CNNIC's survey found about half of the surveyed Internet users misspelled "Google."
The competition in the Internet search engine market is expected to be even more intense as Chinese Internet users are increasingly favouring a single brand.
The survey found that 34 per cent of Chinese Internet users use only one search engine when surfing the Internet; and 41 per cent use no more than two. That means search engines which have yet to establish strong brands could be wiped out of the market.
Source: China Daily