

How Baidu Won China - felipe
http://www.businessweek.com/print/magazine/content/10_47/b4204060242597.htm

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quanticle
Didn't Baidu basically win China because they were the only search engine
willing to play ball right from the beginning with regards to censorship? It
seems that plus the fact that they were homegrown got the playing field tilted
pretty heavily in their direction.

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nl
Did you read the article?

It was more about how Baidu beat other _Chinese_ -companies than how it beat
Google. The other Chinese companies were (a) playing ball on censorship and
(b) homegrown, too.

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cies
in china big companies are usually in close yet undisclosed contact with the
govt. it would supprise me if baidu was an exception.

when i was in china i found that all google services where extremely flaky:
dropped packets, super long roundtrips, meager throughput and often
unreachable for a few minutes. in my opinion they where almost unusable for
'business'.

at the same time websites like slashdot or our beloveth hn were just doing
fine. while baidu.com, qq.com, taobao.com (all super popular sites in china)
were all blazing fast.

i know i am suggesting something without providing proper proof. but for me it
is quite clear what drives the success behind baidu -- its the lousy access
the chinese have to the world's leading alternative to it.

just my 2 rupees.

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vorg
Most google services are unreachable, e.g. all spreadsheets...

[http://www.google.com/transparencyreport/traffic/?r=CN&l...](http://www.google.com/transparencyreport/traffic/?r=CN&l=SPREADSHEETS&csd=1230796800000&ced=1289635200000)

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cies
wow! i didn't know this status overview was keeping history aswell!

amazing to see how internet --the one network for us all-- can end up meaning
something entirely different within the borders of some countries.

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camz
Knowing China intimately and having a family with multiple businesses in the
countries has given me an unique understanding of the business world in the
country (they own factories in southern china that produce clothing for
American companies like armani exchange and RL and are constantly required to
deal with the government in regards to labor, customs and etc).

The main reason why every American company will fail in China is because of
cultural differences. American companies lack the ability to understand the
Chinese mindset and often that leads to misunderstandings that wont be easily
forgiven.

American companies that truly want to succeed in China need to readjust their
business model. You cant bring an American company to China, you need to
invest and develop organically a Chinese company that is substantially owned
by an American company so that the citizenry and the state will allow and
appreciate its existence.

As for competition among the Chinese companies, it is often the case that
developing a relationship with the government is vital. But, developing a
relationship or "guanxi" is a very different concept in Asian culture compared
to American culture. Giving a "red envelope" is considered a necessary sign of
respect and acknowledgment of their status, but in the US its a straight out
bribe.

To curry favor with the people is simple, just give lots and lots of free
data, products or whatever the people want. Whether that data is copyrighted,
patented or otherwise. That's how baidu did it, thats how youku did it and
thats how the next big thing is going to do it.

China's next big wave is going to be to develop its own silicon valley of
sorts because its very popular to copy American startups and put an Asian spin
on the idea to create a NEW multi-billion dollar company.

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PakG1
I think it can be simpler than that. It's just about how products are made for
China. Honeywell has an amazing success story in China, and I got to hear
their top Asia executive this year at the APCAC 2010 Conference in Beijing,
organized by the China chapter of the American Chamber of Commerce. He noted
that China proved that Honeywell couldn't just waltz in with their products,
localize a bit, and succeed. When they tried that approach, they got decimated
by numerous copycats because Honeywell products were too expensive and too
feature-rich for what China needed. He said Honeywell's Chinese copycat
competitors often said, "Honeywell created the market and the demand, but we
had to provide the supply."

So Honeywell changed tactics and set up R&D centres in China to deeply
understand why Chinese companies were buying imitation products instead of
Honeywell products, and then create products that were better suited for the
Chinese market. They got a lot more intimate knowledge of the market and for
the first time were making major global product design decisions outside of
the USA. Then with their new R&D centres, they were able to make better
products at an acceptable price point to the Chinese. They dominated. Today,
only a few of those copycat competitors remain and are considered a real
threat by Honeywell, whereas in the past, there were almost a hundred of them.

The approach was so successful, it became Honeywell's blueprint for how they
want to enter all emerging markets from now on. His main point is that you
can't expect an emerging market to lap up western products just because
they're western. You need a hardcore local presence doing hardcore local
product development, because the market needs will often be unique.
Fascinating story. He's writing a book about everything he learned, and I'm
definitely buying it when it gets released. I'd put the guy's name down, but I
can't remember his name off-hand; have it at home in an APCAC 2010 program
somewhere.

No doubt local presence helps with guanxi and all that, but I do bet you that
as the Chinese economy and market gets more and more sophisticated, guanxi
will matter less and less compared to product and service quality.

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SriniK
Irony in the whole setup. Baidu is chinese government controlled company -
traded and financed in US markets.

It is surprising to me that these companies which get traded with SEC
requirements, yet they are allowed to do whatever it is considered illegal
here and still get away with it. It pisses me off that there are no
regulations/jurisdiction about such shortcuts companies take. There is gotta
be a solution.

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radioactive21
Many Asian countries do this and they back companies that are home grown. For
example Samsung basically is run by the South Korean government. In China, it
is no different, look at all the big companies that were built and raised in
China, and they are backed by the government.

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bigwally
Baidu has won China simply because it is a more relevant search engine for
China's needs.

Go to <http://video.baidu.com/> and search for a TV show you want to watch,
you will find the whole episode. With Google video you will get 3 minute
clips. Baidu also has an excellent mp3 search. Looking for a movie to watch?

Google has made plenty of mistakes in China. For starters most of Googles
documentation is blocked in China thanks to the way China and Google have set
the network.

