There are five well-known search engines in China, but two of them make up around 84% of the market share. Baidu (百度) and 360 Search (360搜索) are the undisputed market leaders of online search in China, in both users and market share.
The number three and four search engines in China are Chinese internet firm Tencent’s Soso search engine (搜搜) and Sohu’s Sogou (搜狗搜索). The latter is number three, while Soso was number four in the Chinese search market.
I’m going to look at the search engine market in China in detail. I’ll explore the market and then examine the pros and cons for the best search engines for marketing.
For this blog post I’ll focus on search engine use on desktops as the mobile browser market in China is so fragmented.
What happened to China’s search engines in 2013? In January 2013 Baidu held a healthy 72% share of the search engine market in China. Qihoo’s 360 Search (So.com) had 11% while the other three major Chinese search engines, Sogou, Soso and Youdao held 8%, 4% and 0.3% respectively.
By January 2014 things had changed significantly. Baidu’s market share had dropped to 58%, while Qihoo’s had increased to 25% matching exactly the amount of market share that Baidu lost.
Towards the end of 2013 Tencent invested US$448 million in Sohu’s Sogou online search business, taking a 36.5% stake. At the time of the deal many expected Soso to completely disappear, although today it is still a standalone search engine.
As 2013 drew to a close Soso’s market share declined rapidly until in January 2014 it was included with Sogou’s market share stats on CNZZ. From this point it was called new Sogou (新搜狗).
During this same period Youdao (有道), NetEase’s search engine, rapidly declined plummeting down CNZZ’s monthly updates. Today it is included in CNZZ’s stats at ‘other’ because its market share is so small.
2014 has been characterized by an increasing rivalry between Baidu and Qihoo. 360 Search is expected to continue the progress of its commercialisation drive for a sustained period of time.
In Q1 2014, in terms of revenue from search engines, Baidu held 81.7% of the search engine market compared to 3.7% for Sogou and 2.5% for 360 Search.
Qihoo’s rapid expansion of its market share and users has seen its revenues increase and marketers are seeing potential there.
In terms of the search engine revenue market structure in 2013, keyword advertising and contextual advertising brought the primary revenue. According to iResearch keyword advertising revenue took up 74.1% of the Chinese search engine market. Contextual advertising and Navigation advertising revenue accounted for 13.7% and 4.5%.
Search engine advertising revenue, namely revenue from keyword ads and display ads, accounted for 87.8% of the total revenues of search engines.
So far, 2014 has seen 360 Search drive up revenues from paid search advertising, but there is still room for growth. If Qihoo’s revenues increase in line with its increase in market share and users then 360 Search will start to become a very popular platform for advertising.
Baidu is by far the most popular search engine for advertisers. As such, it’s the basis of comparison for all other search engines in China. Even though there is competition from 360 Search, Baidu is still the best search engine in China.
Baidu has the highest usage of all the other search engines on the market. According to CNZZ the usage rate of Baidu in June 2014 was 60%. It has a highly developed ad platform. In Q1 2014 keyword advertising was still the top priority of Chinese advertisers.
Baidu also has a very useful remarketing functionality built into its display network. There are 600,000 websites that partner with Baidu to display banner ads.
Finally, Baidu has a very good desktop editor and good security and click-fruad protection. It is being constantly updated and therefore is always ahead of the game. From a digital marketing point of view Baidu is still best, even if so.com is attracting new users.
Qihoo’s 360 Search, also known as so.com, has quickly become the second most used search engine in China. In June 2014 the usage rate of so.com was 26%. It’s for this reason that marketers in China have been attracted to using 360 Search for paid advertising.
One reason that so.com is popular for marketing is because it tends to have a significantly lower cost per click than Baidu in many industries. But this is tempered by the fact that it usually doesn’t provide a level of results that is on-par with Baidu.
Conversion rates on 360 Search tend to be lower for comparable projects than compared with Baidu. Of course, so.com is newer to users and marketers than Baidu.
I believe that because it is newer, there is less trust with 360 Search than compared with Baidu. Users and marketers know what they get from Baidu and therefore conversion rates are higher.
But trust in so.com is rapidly changing as usage and market share stats show. For these reasons I’d suggest that conversion rates on so.com will improve quickly. And this is especially true for businesses that face less competition in their niche who are likely to find a lower cost per click on 360 Search.
Which Chinese search engines do you use? Do you use any for paid advertising? As ever leave your comments below…