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Report From The Field: Search Engine Strategies China
SES China is always a fascinating experience. Although the content is similar to other SES shows around the world, there are notable differences ranging from unique perspectives on the Chinese and Asian markets to a variable “schedule” that seems to work fine for locals but is guaranteed to drive anyone from a western culture accustomed to events starting and finishing on time absolutely nuts.
Last year, SES China was in Nanjing in Jiangsu Province—an industrial city on the Yellow River in the north-east part of China. This year, the conference moved south, to the coastal city of Xiamen in Fujian Province. Xiamen is due west of Taiwan, and the locals say that the city shares a similar culture and dialect with the nearby island.
The audience for this year’s SES China seemed younger than a year ago. In fact, speaker Stone Chen, on the Domain Strategies panel, actually referred to the Tian’anmen square incident in 1989 as a “student uprising” (implying that most people in the audience weren’t familiar with this event occurring in the apparently ancient past). There also seemed to be a nearly equal mix of men and women at the show, suggesting that China is an equal opportunity country for search marketing professionals.
The size and dynamic growth of the Chinese online population was a theme touched on again and again during the conference. China currently is in the #2 position in terms of number of internet users, with estimates ranging as high as 150 million users (the U.S. is #1 with about 160 million).
Despite this impressive number, 150 million users amounts to just 10% of China’s estimated 1.5 billion people. And the growth in new users in China continues to expand at an impressive clip, while the U.S. has pretty much reached full saturation—just about everyone not yet online in the states is either too young or old, or not literate enough to use the internet.
This means that sometime in 2007 China will become the world leader in numbers of online users, and will likely become one of the most significant online marketplaces within 5 years or so—an important consideration for search marketers wanting to reach the widest possible audience. Ignore China, and you’re ignoring what will inevitably become a—if not the— dominant force in the global online marketplace in the very near future.
Demographically, 60% of SES China conference attendees were small advertisers. This makes sense: despite its rapid economic growth, China remains a country made up of millions of small businesses, with few non-governmental national organizations or large brands. Also attending the show were representatives from the large portals, such as Sina, Tom.com and others, attendees from other Asian countries—even Chinese government officials, who have apparently decided to embrace the power of search marketing to help promote official policies and programs.
SES China co-chair Inway Ni and I opened the conference with a keynote conversation with Yvonne Chang, vice president of Yahoo China and Alibaba (the largest online auction site in China). Like many executives in the Chinese search community, Yvonne is a native (Taiwanese) who attended university in the U.S. and gained internet industry experience there before returning to China. This mixture of local knowledge and international experience gives Yvonne a unique perspective on the Chinese internet and how it compares with western players.
In terms of market share in China, Yahoo is the #3 player, behind market leader Baidu with 65% share and Google with about 20% (these numbers are approximate averages of market share numbers from several sources that monitor Chinese internet usage). Although Yahoo lags behind the competition, Chang is confident that Yahoo can maintain or even increase its popularity among Chinese users.
How? By taking more risks than the leaders. By emphasizing Yahoo’s core mission of connecting people to the information they care about and other people that are important to them. But she also emphasized that China is unique, and it’s not possible to simply clone Yahoo.com and make it work in China. Yahoo China must address the needs of Chinese users and provide a different type of search and user experience.
Chang stands a good chance of boosting Yahoo’s performance in China, given her previous record in Taiwan. In five years time, she transformed the site from a middling player to a market share leader, primarily by connecting local and international businesses. She said she worked closely with local advertisers to help them effectively reach not just local Taiwanese searchers, but other potential customers and partners on a global scale.
I asked her what unique challenges Asian search marketers faced. She replied that while there were certain factors that were unique for Asian search marketers (language, culture and the fact that credit cards are still not widely used online in Asia), she viewed search marketing as a comparatively similar process for players throughout the world.
What’s Yahoo’s strategy to catch or overtake Baidu and Google in China? Chang said that she views her primary mission as not killing the competition, but rather expanding the overall market, which will create opportunity for all players. There’s enough potential growth in China that Yahoo can significantly expand even as other players continue to grow and thrive as well.
To wrap things up, I asked Yvonne where she saw the Chinese search space in five years. “Much bigger!” was her response. She also said that she expected the overall sophistication of Asian search marketers to have gained parity with those elsewhere in the world—and foresees an increasing globalization with national and regional boundaries being less demarked than they are today.
In an overview of the Chinese search market, Yang Wu, CEO of market research firm Analytics, offered up some interesting stats. He affirmed Baidu’s dominance, but also showed that Google and Yahoo both were showing signs of accelerating growth. Watching his presentation, I felt an eerie sense of deja vu from an SES conference in 1999. Most speakers then were focused on the market leaders of the day (AltaVista, InfoSeek, Lycos), but there was a definite undercurrent of excitement that year focused on an upstart search engine with the goofy name of Google. Could we be seeing the portents of a shift in market leadership in search in China?
I moderated the Meet The Search Engines panel with John Wu, CTO of Yahoo China and Alibaba, Jianfei Zhu, Senior Software Engineer from Google and Pei Chen, CEO of Zhongsou. This was an entertaining panel, with the speakers mostly seeming to talk about how and why their respective search engines were better than the others (the real-time translation was poor, and since the speakers presented in Chinese it was difficult to truly follow what was going on).
In all, my impression of SES China was quite favorable. The show took a great stride forward this year on many fronts, including the quality of the venue, timely and relevant programming, and the professionalism of the local organizers. While the poor translations and “variable” scheduling detracted something from the show, these were relatively minor annoyances overall. Kudos to Inway Ni and his team at TimeV.
I moderated two other panels at the show: Searcher Behavior, which focused on Chinese searcher user behavior, and SEM Strategies for the Enterprise Life Cycle, focusing on key aspects of managing search marketing programs for large, multinational organizations. I’ll post reports on those two panels later this week.