24 May 2019
Chinese technology firms are fully capable of competing with foreign players, says Baidu's Robin Li, amid talk that Google could re-enter the China market. Photo: Bloomberg
Chinese technology firms are fully capable of competing with foreign players, says Baidu's Robin Li, amid talk that Google could re-enter the China market. Photo: Bloomberg

Google vs Baidu Round 2

If you want success, do not compete with Google. That is the street wisdom, reflecting the belief that taking on the operator of world’s largest search engine can only be a losing game.

Given this, how do we now assess the prospects for Baidu, which may have to lock horns with the US tech giant in the China market once again? 

With Google’s return to China a very real possibility, given reports that the company is readying a censor-friendly search engine specifically tailored for the market, Baidu, which currently dominates the Chinese internet search landscape, definitely has something to worry about.  

Having built its fortune in the absence of Google, which pulled out of China eight years ago due to censorship restrictions but is now seeking to re-enter the market, does Baidu have what it takes to fend off potential new competition?

Baidu, as can be expected, is making brave noises, saying Chinese technology firms are fully capable of standing up to the might of foreign players.

Still, the mainland search giant can’t take the loyalty of its users for granted, going by the excited chatter among Chinese netizens about the possible return of Google to the market. 

Given a choice, it is possible that many users will switch to Google, causing significant erosion in Baidu’s current overwhelming market dominance. 

In an online poll on Weibo this week, 87.3 percent of respondents said they will opt for Google, while only 5.8 percent said they will use Baidu.

Even state media have been talking about Google in recent days,

A commentary in People’s Daily, the Communist Party mouthpiece, said Google would be welcome as long as it complies with the requirements of Chinese laws. The US firm’s 2010 decision to exit China had been a “huge blunder” that led to the company missing out on a golden opportunity, it said.

Interestingly the commentary was later removed from the People’s Daily website as well as its Facebook and Twitter feeds without explanation.

The Global Times noted that even the Weibo poll, which took in the opinions of some 6,500 netizens, had been pulled from the social media platform.

The developments suggest that Chinese authorities want to tamp down expectations in relation to Google’s possible re-entry to the market. 

Also, nothing is certain yet, especially given the ongoing trade row between China and the US.

That said, Baidu would do well not to rest easy with regard to competition from Google.

Google had almost 30 percent market share in China before its exit.

Baidu CEO Robin Li said on Tuesday that he is confident about his firm’s ability to compete with its US counterpart, and that it is wrong to assume that Baidu’s market dominance is due to Google’s exit from China.

“If Google returns, we can fight them… and win again,” Li said in a WeChat post.

Google launched its service in China in 2000, earlier than Baidu, but the latter quickly caught up and became more innovative than Google, Li wrote.

Well, only time will tell if Baidu can indeed fend off the Google threat, or surrender a significant chunk of its market to the US-based rival.   

The stock markets, meanwhile, seem to be giving their own verdict with regard to the outcome of the potential battle.

Baidu shares fell 17 percent in the past month in the US, while those of Google surged 8 percent to hit a record high during the same period.

Keep watching this space!

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EJ Insight writer

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