In the digital “game of thrones”, markets continually shift as the internet giants — Google, Amazon, Facebook and Apple increase their offerings from hardware to software and software to hardware, between consumer and enterprise, encroaching on each other’s traditional heartlands and fighting endless wars of intellectual property attrition in the courts. One thing was certain, however: that Google could sleep soundly in its ivory tower as undisputed Lord of Search. However, rebel outliers in South Korea, China and Russia have refused to submit and now it seems they may be setting their sights on Google’s throne.
Beyond the language barrier Although Russia, Korea and China each have distinct and unique languages, Google’s failure to bring them within its sphere of dominance cannot be attributed to linguistics alone. Although founded on English-language search, Google has successfully conquered many non-English speaking countries such as Poland, Spain and Indonesia. However, language does hint at a wider issue affecting Google’s global campaign, which is one of cultural, rather than solely linguistic, affiliation.
In Russia, Korea and China, Google is seen as a foreign product by largely patriotic consumers. This natural preference for local products and companies is accentuated in Korea and China where, whether for political, ideological or security reasons, Google’s reach has been actively limited. Google’s operational HQ in China had to be moved to Hong Kong due to the Chinese government’s tight censorship; likewise, many Korean webmasters have intentionally blocked Google and other global search engines from accessing their sites for security reasons, further exaggerating the existing cultural advantages of local providers.
However, this is not a story of active rebellion or implicit xenophobia. The single biggest factor in Google’s failure to dominate in these three jurisdictions is the existence of credible, and increasingly powerful local competitors, which not only deliver on point of origin and language compatibility, but offer products which cater to local design preferences and have proved more popular than Google’s format on their own merits. Google has developed an excellent search algorithm which enables its users to search very effectively. However, beyond its simple yet powerful search box, Google may have been focusing on its back-end at the expense of evolving front-end interfaces to keep users evangelical — at least in these three countries.
This poses a wider question about the internet giants as a whole: by moving their focus from consumer interface to monetisation, have they let down their guard, and opened their kingdoms up to invasion? Competitors across Asia (notably China) have been expanding at an impressive rate and the Alibaba’s and Rakuten’s of the world are increasingly seen as a genuine alternatives to the incumbent rulers. While the names Yandex (Russia), Naver (South Korea)and Baidu (China) are not yet globally recognised, they should not be underestimated.
Catering to local taste Unlike Google, Yandex and Naver have focussed on customising their interface to local consumer preference, offering busier search pages, complete with news, weather and various other features which aggregate the search function with a more centralised portal into the online experience.
Naver’s “Knowledge Q&A” function has also proved extremely popular, allowing users to ask and answer just about anything, within a forum which is uniquely Korean. This user-generated content section has come to be seen as a complimentary offering to the official search results provided by the engine itself.
China’s Baidu’s selling point, on the other hand, is in limiting its search to Chinese language only, thereby clearing out the English-language clutter which would typically make up the vast majority of the results, providing results that are far more useful to a Chinese user. Each of the dominant local players is using its superior understanding of local consumers to provide products which are more appealing and are thereby winning the battle for hearts and minds.
Expansions Far from content with ruling their considerable local markets, (Baidu dominates a search market with over 600 million internet users, 25 per cent of all internet users worldwide) the Asian search barons are eager to increase their territories. Baidu recently launched its localised search engine in Brazil and a beta version in Thailand and Egypt.
Naver has entered the global messaging market through its product “Line” in Japan, which already has over 450 million users worldwide and is further expanding into Mexico and the US. Speculation is that it is looking to list in Tokyo or New York in H2 2014 with a valuation of US$20 billion. Small fry compared to Google but not insignificant in terms of market share and competition.
Yandex is not yet expanding vertically, but continues to add new horizontal business lines in order to compete with Google at home and abroad, with Yandex.Disk offering services similar to Google Drive and new app Yandex.City recently launched on Android and iOS, with the largest database of user reviews on Russian companies.
Both digitally and geographically, credible competitors are pushing forward and while Google continues to sit atop the Iron Throne for now, its position is by no means guaranteed. As credible rivals — the usurping princes in the “game of thrones” — enter the world stage we can expect to see fierce competition and perhaps even an uprising in the near future.
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Baidu is a Chinese website and search engine enabling individuals to obtain information and find what they need.
100M Series C Investors:
GoogleUnited States of America
Google provides search and advertising services, which together aim to organize and monetize the world's information. In addition to its dominant search engine, it offers a plethora of online tools.
Rakuten is a leading e-commerce company with more than 18 million customer accounts, focused on providing its customers with a rewarding shopping experience.
42.4M Venture Round Investors:
Naver is a definitive digital resource that enables its users to find definitions, synonyms, pronunciations, and translations of words.