What Is Google’s Plan to Cash in on China?

June 4, 2018 - 6 minutes read

AI app developer

Google wants in on China’s burgeoning tech scene. The world’s largest country is going through a sort of tech renaissance; companies like Tencent, Alibaba, Baidu, and Huawei are fostering rapid growth in a variety of areas such as AI development and the Internet of Things.

While its strategy has been low-profile, Google has undoubtedly set its sights on becoming part of this movement; it’s an opportunity that can’t afford to be missed.

Smoothening a Rocky Relationship

Google recently launched Files Go, an Android device file manager, in China last week. The launch itself was far from Google’s most noticeable one, but the way in which it was carried out hints at how Google views the country. The San Francisco Bay Area-based development giant has been noticeably absent from China and its tech scene since 2010. This was mainly due to mounting government pressure on the company to redirect its Chinese search service to Hong Kong.

Since the Google Play Store doesn’t operate in China, the company is relying on some of its Chinese partners to stock the app in their app stores. Tencent, Huawei, Baidu, and Xiaomi will all participate in the distribution. Fortunately for Google, each of these company’s stores happens to be some of China’s most popular third-party stores.

Re-entering the Largest Smartphone Market

Now, I know what you’re thinking — the creator and main developer of Android is relying on third-party app stores to distribute one of its official products. It’s strange, isn’t it? But like all decisions it makes, Google had some very valid reasons for doing it this way.

The fact can’t be ignored that China is the country with both the highest annual app revenue and the most app downloads. So it’s really a no-brainer that Google would want to be part of China’s economy again. To what extent is where it gets interesting. Of course, there are already rumors that Google plans to revive either its search business or the Google Play Store in China.

Reviving either of those products would be ambitious. But regardless of which route Google takes, one thing is clear. Complying with China’s rules will be the key to success.

Just a Minor Setback

The benefits of more business with China are obvious for Google. That doesn’t mean accomplishing this will be easy, as many other entities and organizations know. Right now, China and the U.S. are¬†going through a bit of a rough spot in the form of a trade standoff.

This has been an unfortunate thorn in both countries’ tech economies. It has caused Xi Jinping, current President of the People’s Republic of China, to take a protectionist stance for local Chinese businesses and industries. He’s been especially protective of AI. Xi is no stranger to controversy; he was responsible for banning VPNs in China.

The whole situation is an odd one for Google; they basically have to start from square one in an ultra-competitive market. Why would any Chinese citizen even consider Google’s products when they have their own brands that have built up trust over years?

Compliance & Cultivating Relationships Are Key

This takes us back to Google’s distribution method for Files Go. Google’s relationships with partners offer the company a better, more intimate approach to gaining the average Chinese consumer’s trust. This is the logic behind Files Go’s release. Expect to see other Google products follow suit; Files Go isn’t even the first time Google has done this. The company recently teamed up with Huawei and Xiaomi to bring its ARCore technology to China.

By standing side-by-side with all of the big names in China’s tech scene, it will be easier for Google to tap into resources like talent and tech. Recently, the company finalized an extensive patent deal with Chinese tech giant Tencent. Google is also investing in promising Chinese tech companies, like AI startup XtalPi, AI and hardware firm Mobvoi, and Chushou, a live-streaming platform.

And if all of these moves weren’t enough, Google is also keen on increasing and maintaining a more substantial presence on Chinese soil. The company recently opened a Beijing-based AI lab in order to open more direct access with Chinese tech talent.

Only time will tell if Google is making the right moves with this multi-pronged strategy. You can’t deny it, though — this plan won’t fail for lack of effort.

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