Internet giants’ headache in China

I found an interesting phenomenon in Chinese IT industry— for all those especially powerful Internet giants, they almost never be “acclimatized” in China when facing the competition with those small, low-funds Chinese local company.

No example can be more obvious than the comparison between Baidu and Google. The latter used to be the most popular Search Engine in China. But when Baidu was created, google began to keep letting their advantage slip. Now Baidu takes almost 80% market share, comparing with Google’s poor 14%.

In China, the most popular instant messaging program (IM) is QQ, standing first by its 340 million of users. The global champion of IM market, MSN, only takes 4.1% market share in China. This year, it even be squashed to the third place by Fetion — an IM program developed by China Mobile. By providing the function of sending free short message (SMS), it attracts lots of young people.

Now take a look at social network websites, which has been popular in teenagers, college students and young adults around the world nowadays. The biggest one in China is Xiaonei, taking 63.4% of market in China; and the followers are also local, with an almost nonexistent part of MySpace and Facebook’s repertoire — although both MySpace and Facebook tried a lot on their “localization”. It’s interesting that Mr. Luo Chuan, who left MSN’s management since the dissatisfaction of their localization work, quitted his job again after he had been the CEO of Chinese MySpace because of his unsatisfactory achievement.

Look at the e-commerce situation in China: Yiqu, which is the pioneer of Chinese e-commerce, purchased by EBay in 2003 and hence supposed to be the leader of Chinese C2C e-commerce industry, be overtaken by Taobao, a Chinese local C2C company which is 4 years younger then it. Comes to B2B market, Amazon’s Chinese company Joyo, far behind the Chinese local B2C company DangDang although it has abundant financing support from its parent company.

And there are plenty of examples as well: Yahoo can never beat the top three local portals in China; AOL even exited the Chinese markets; It seems all the people in this world watch videos on YouTube, but Chinese people only enjoy the video on Tudou, Youku and 56.com; FeedBurner is much more powerful than Chinese local company Feedsky, but people in China only chose the latter; Korean online game once was very popular in China, but after their Chinese agency developed their own online game, Korean people was totally kicked out from the game…

What makes Chinese Internet users so unique? Why those Chinese local companies can always kick Internet giants’ butts? We may need another article to analyze the reasons. But right now, I have to rack my brains to think about how to let bab.la taking a big cake from the competition with those Chinese online dictionares. —Look, another example of local Chinese companies making headache to an “Internet giant”!

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