Google bets on emerging markets - but what about China?
Google has dropped R and C from BRICs - the four emerging economic powers that Goldman Sachs argued would help to change the world economic order in the 21st Century.
Ever since Jim O’Neill, the investment bank’s chief economist, coined the term at the beginning of this century. This catchy acronym that stands for Brazil, Russia, India and China has come to symbolise the emerging markets.
However, the technology giant has excluded China and Russia from its definition of emerging markets as it heralds the new age of “the next billion” when developing countries bringing another billion internet users to the world by 2015.
Julian Persaud, Google managing director for Southeast Asia, told a gathering of tech and business reporters in Singapore this week that emerging markets and mobile devices would change the face of industry in the coming years.
However, the biggest and most important emerging market of all, China, was barely mentioned during his speech and or for the matter, during the full day publicity blitz.
When asked about this curious exclusion of China and Russia from Google’s definition of emerging markets, Persaud said the purpose of it was to illustrate the size of emerging market outside of these two populous countries.
‘‘Even though you exclude these two very large population countries, there is still 3.3 billion people,’’ said Mr Persaud, ‘‘so it is more to illustrate the size of emerging market opportunity even when you exclude these two countries.’’
Google’s exclusion of China and Russia is not only making a point about the opportunity outside of these countries, more importantly, it highlights the limited expansion opportunity for the internet giant in these two countries where internet censorship is rampant.
While Google is spruiking the tantalising prospect of the next billion people coming online, it is also waging a smokeless war against China and Russia in Dubai where governments and tech companies are debating the future of internet regulation.
Russia is proposing for national governments to have rights to introduce public policy to regulate internet activities, these proposals have been described by the US ambassador as "the most shocking and most disappointing" of any he had seen.
In response, Google is urging billions of its users to tell their governments to keep their hands off the free internet.
‘‘Love the free and open internet? Tell the world’s governments to keep it that way,” says Google on its home page.
Google was embroiled in a bitter stoush with Beijing over internet censorship in 2010 when the internet giant told the Chinese authorities that it was ‘‘no longer willing to continue censoring’’ Chinese internet users’ search results on sensitive topics.
US Secretary of State Hilary Clinton also weighed in on the tag-of-war between Google and the Chinese government, saying ‘‘a new information curtain is descending across much of the world’’ and ‘‘countries or individuals that engage in cyber attacks should face consequences and international condemnation.’’
The Great Firewall of China has been stunning the growth of internet giants such as Google and Facebook in China, one of the most important and fastest growing internet market in the world.
The Asian economic powerhouse has more than 500 million internet users and is adding 50 million more every year.
Chinese online bazaar Alibaba announced a few days ago that it just sold a trillion yuan, or $150 billion, worth of goods on its two platforms so far this year. Sino weibo, a popular Chinese micro-blog has more than 300 million users.
Chinese home-grown research engines such as Baidu are dominating the local market and so the growth potential for Google looks grim in absence of further substantial lessening of internet restriction.
It looks like Google has no choice but to bypass this important market and focus on other emerging markets in India and Southeast Asia.
Mr Persaud said India was one its fastest growing markets for many of its products including apps downloads on Google Play, which grew 400 per cent over last year.
This journalist traveled to Singapore as a guest of Google.