The mobile search market in China is in some ways more interesting than browser-based search, primarily because there is no company with more than a 35 percent market share. It comes as no surprise that Baidu is the dominant player but it’s the companies holding smaller shares of the market that are of particular interest.
A study earlier in the year by Analysis International demonstrated just how fragmented the market is as the chart below illustrates.
Source: Analysys International 2010
Here is a snapshot of five players:
Yicha is an interesting one. Although originally from China, the company has been successful in Japan over the past year, with revenues of 200 million yuan. However, it has lost much of its share of search in the Chinese mobile market. From holding around 50 percent of the market in 2007 it now comes in behind Google and 3GYY in fifth place with 10.32 percent. The chairman, Liu Bin, told Tencent technology in August that the main focus for 2011 would be using their experience from Japan to re-establish the company in the Chinese market. He used Hua Wei as an example of a Chinese company that had applied a successful formula from overseas to enhance its position in China. Yicha has partnered with Tencent Soso, which may also boost its exposure in the coming year.
Launched in 2007, 3GYY is similar to Yicha in that it focuses on trying to tailor the mobile search experience to the user – which is quite a contrast to the clean interface that Baidu offers. From the main screen the similarities between all the dedicated mobile search engines are obvious with the same type of information being available such as maps, MP3 search, games, and news. 3GYY has been rewarded for its efforts in the past year moving into fourth place overall overtaking Yicha.
We might have thought that Google would be doing better in mobile search than in browser-based search, particularly with the wide adoption of Android by Chinese mobile handset manufacturers. The open source nature of Android has in fact worked against Google here and Baidu is ensuring that mobile manufacturers are in essence making Android ‘Google free’. Microsoft has been launching a similar attack with foreign handset makers, most notably with Motorola who has installed Bing as the default search engine on many of their phone models sold in China. Although Bing itself is yet to make an impact on mobile search in China, it all helps chip away at Google’s position in the market.
Easou, founded in 2005, had approximately 100 million yuan in revenue by 2009 with around 60 to 70 percent coming from advertising. The company has 200 staff in both Shenzhen and Beijing. After Baidu, Easou is one of the main beneficiaries of Googles’ demise in mobile search over the past 12 months. Easou has also done a good job forming partnerships in particular with Sohu in March 2010 and Taobao. The company has established a network of 30 advertising companies and around 10,000 small and medium manufacturers as clients around Southern China.
Xinhua Wants to Try too
Although still yet to enter the market, China’s state media arm Xinhua and China Mobile announced in August this year their joint plans to launch a search engine in 2011. Many doubt whether such a search engine can succeed, but with China Mobile as the key partner we can expect some bias towards mobile search in their offering.
With the total revenue from mobile Internet users expected to reach 1.86 billion yuan (iResearch) by 2012 it will be no surprise if more players emerge or companies redouble their efforts to stay in the game.