The Internet is on the way to becoming one of the distribution channels and advertising media most attractive within The Great Wall. At least, this is what the data on Internet shopping and on ad investment, published recently by Ctr World Panel, and i Research Consulting Group.
In this context, maintaining a balanced competition environment among search engines such as Baidu, Google, Yahoo or Bing acquires a major importance for advertisers, the own search engines and consumers.
According to the data published by Ctr in November 2009, the number of households who bought through Internet shops in the PRC increased by a 91% in the first 9 months of 2009, compared with the same period in 2008.
Rocketing boost for the e-commerce, but also in ad spending on the Internet
The consultancy firm iResearch published recently that the market for advertising in digital media in China had grown by a 21.2% during 2009, to the $32.020Bn. Part of the investment went to traditional portals, part to search engines, another portion to on-line videos and another amount to virtual communities. A succulent banquet that promises to become even more appealing this year.
The above-mentioned consulting company expected an increase of the ad investment in digital media until the $4.4Bn for 2010 in this Asian country. Although the level of online purchases of non lasting high rotation goods is still relatively low, the share of this channel in the segment of products for babies reached the 15% in Beijing (capital city of the PRC) last year.
Chinese consumers are taking adavantage of the convenience, the variety of supply and lower price offered by fast emerging alternative channels compared to traditional brick and mortar retail. Internet is among the new distribution channels, although it is not the only one. Direct sales by catalog and the specialized shops (children, cosmetics etc. ) are also experiencing an increase in their sales.
Who will take the part of Google if it leaves PRC business?
In this context, maintaining a balanced competition environment among search engines such as Baidu, Google, Yahoo or Bing acquires a major importance.
And not only to protect people’s freedom of speech, but also to promote the free competition of companies and an adequate protection of consumers’ rights within the Chinese market.
Because a free competition environment favours economic growth, but also and especially it protects the rights of consumers, who can decide without any hindrance among a wide range of products. A wide range of products that usually get improved and kept at reasonable prices, precisely because they must compete with others to be chosen.
Limiting the number of search engines to one or two and both born in China does not guarantee, the right conditions for free competition between the companies willing to sell their products in the Internet. Further more, if one takes into account that in case the company doesn’t appear in some search results pages or is placed far bellow the first, this fact actually can hinder the enterprise’s contact with potential online clients.
If one company can’t be watched or easily accessed by consumers, who search for products, information, etc in the Internet, their sales can be negatively affected, and advertising e-revenues of the sites censored as well. The reduction in the number of search engines, derived from any circumstances different from the Internet surfers’ preferences, also affect competition within the digital advertising market. These search engines include paid search results and a lower number of search engines could result in a rise on search ads prices. Less search engine brands could also result in dominant positions and favor abusive practices.
Who will take the cake slice of Google in the search engine and paid search markets if the US search engine leaves China?. Given PRC Government practices and censorship actions, Probably Chinese search brands such as Baidu and Bing.
Image over the headline.- The Great Wall of China, section of Badaling. Photo by Airunp published on Eastwind marketing under Wikimedia Commons 2.0 license. To see the original photograph, click here
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Google thinking about quitting business in China
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