With 688 million Internet users and growing, China has become a compelling market for Western companies looking to expand globally. What makes it this market even more enticing is the number of Chinese Internet users is growing at a rate that far surpasses that of most countries, which speaks to the business growth potential in the marketplace.
Despite the incredible potential, China is a unique market, and many companies lack the knowledge and expertise necessary to succeed in online marketing in China. In fact, most marketers have no idea where to start.
As a digital marketing agency providing international services, we often suggest our clients start with the search engine. It’s the ideal entry place to begin gaining visibility and traction in a new marketplace.
The goal of this article is to give B2B marketers an idea of why search engine marketing is important in China and why Chinese search engines are different from Google or Bing, or other Western search engines.
A Great User Base and a Broad Business Adoption
First, let me offer a few statistics to illustrate the breadth and depth of the online marketplace in China. According to the data from CNNIC (Chinese Internet Network Information Center), as of December 2015, there were 566 million people using search engines, which accounts for the majority of Chinese Internet users (82.3 percent) and it’s an increase of 44 million users year-over-year.
In comparison, there are an estimated 219 million search engine users in the United States in 2016, which was only 4 million more than 2015.
Users are not only conducting personal searches, but search engines are also being used in business settings. As of December 2015, 33.8% of enterprises had launched Internet-based marketing activities and about half (47.4 percent) had invested in search engine marketing.
Online sales and marketing efforts in China are still in the early stages of development, but their use is growing quickly with the growth of technology and e-commerce.
A study from Nielson shows, online sales currently comprise 11 percent of total retail sales in China, but it’s growing at a significant rate – 53 percent! – year-over-year.
Not Google, But Baidu, Qihoo 360 & Sogou
Since then, when users type Google.cn, they will be redirected to Google.hk, which is Google’s Hong Kong presence. Even like this, only a few Chinese people use Google.hk; right now, Google only accounts for 0.34% market share by usage in China.
In China, the top three search engine players are Baidu, Qihoo360 (also known as Haosou), and Sogou. Baidu has 54.3 percent of the market share of usage, Qihoo 360 accounts for 29.24 percent, and Sogou holds 14.71 percent.
In 2015, total search engine advertising revenue reached 68.26 billion RMB (US$10.55 billion) – an increase of 32.2.7 percent YoY, according to iResearch. In terms of revenue, Baidu continues to be the leader of the Chinese search engine market (80 percent) followed by Google, Qihoo360, and Sogou.
Let’s take a closer look at each of the big three Chinese search engines:
Overview of Baidu
Established in 2000, Baidu is the number one search engine in China. It is ranked as the fourth most visited website in the world by Alexa.com and holds the second largest share of the global desktop search engine market (behind Google).
Every day, 6 billion searches are performed on Baidu. It’s as familiar to the Chinese as Google is to Americans. When you have a question in China, Chinese would tell you, “Ask Mother Du.”
Baidu claims that it is the best Chinese search not only because they know Chinese better, but also because they know Chinese audiences better.
A Baidu company profile explains the technology this way, “Just to cite one example, we believe there are at least 38 ways of saying “I” in the Chinese language. It is important that we recognize these nuances to effectively address our users’ requests.”
To complement its search engine, Baidu has dozens of featured products. One of the major differences between Google and Baidu is that Baidu favors its own platforms/products in its search results.
For example, when users search for “search engine optimization,” the first three positions of the organic search results are Baidu Baike (Baidu Encyclopedia), Baidu TieBa (Baidu PostBar) and Baidu Baike (Baidu Encyclopedia). Then, the sixth result is Baidu Zhidao (Baidu Knows), and the eighth result is Baidu Wenku (Baidu Articles).
B2B Marketing Takeaway
From a B2B marketing perspective, many of these free Baidu products offer an integrated way to enhance SEO efforts. In addition, Baidu’s free analytics tools can help webmasters analyze their efforts.
Overview of Qihoo 360
Qihoo 360 started from an Internet security company with a broad product line. Their antivirus software has a good reputation in China and it’s free to use. By pairing with the security products, Qihoo 360 search adopted a broad audience when it launched in 2012.
It is the default search engine used in the 360 Internet browsers, which is helping to sustain its continuing growth. Within a short period, Qihoo 360 has become the second largest search engine in China and the fastest rising competitor to Baidu.
Qihoo 360 search claims that it is the most secure search engine. Relying on the advanced cyber security technology of the parent company, Qihoo 360 search can block fake or malicious sites and provide a more secure search environment.
Also, because of its broad product line, which includes security products, an Internet browser, and apps, Qihoo 360 search has positioned itself as the biggest native advertising platform in China.
Meanwhile, Qihoo 360 search targets small and medium businesses for their advertising platform. This strategy may be mainly to attract businesses that probably could not afford the more expensive ad spend on Baidu.
Another benefit of Qihoo 360 is its search results page only has a few advertisements. This gives advertisers an opportunity to avoid the tense competition on Baidu and grab niche traffic at a much lower cost-per-click.
B2B Marketing Takeaway
While Qihoo 360’s lower CPC may be attractive, it still cannot compete with the Baidu’s technology and reach in the search space. It is better to use it as an extra testing channel to supplement a company’s Baidu program and leverage the ROI, rather than to start with it exclusively.
Overview of Sogou
Sogou was launched in 2004, but its use was not widespread until more recently. After developing the most popular Chinese input software in China, people started to get familiar with this brand. Also, Tencent, the fourth largest Internet company in the world, invested in Sogou in 2013. This investment fast-tracked Sogou’s growth.
As a rising star of the Chinese search engine market, Sogou has sought out a niche position. With the strong support from Tencent, Sogou exclusively provides the search results of Wechat content (Wechat, the most popular social media in China, is owned by Tencent).
Seeing the success from its Wechat integration, Sogou partnered with Zhihu (a popular question-and-answer site) to integrate more content search results.
More recently, in May 2016, Sogou announced a collaboration with Microsoft Bing and launched two new products: Sogou English Search and Sogou Scholar Search.
B2B Marketing Takeaway
Gradually, Sogou has taken the unique position as a content searching provider in order to attract users and expand market share. With the growth of content marketing overall, B2B marketers should keep an eye on Sogou’s growth and development.
Chinese search engines play a significant role in the population’s life every day for both personal and professional purposes. B2B companies looking to leverage China’s large and growing online market need to develop visibility on China’s biggest search engines.
However, in order to have any chance at success in the marketplace, a strong understanding of the Chinese search engine space is necessary. Search engine marketing that works for Google and other Western search engines doesn’t always translate to China’s search engines or resonate with Chinese customers.
Due diligence research into the marketplace is the first step toward developing a China-specific marketing strategy.