US Tech Giants trying to survive the Chinese Market

US Tech Giants trying to survive the Chinese Market

China and its economy wield great power over the American giant including the likes of Google, Apple and NBA; this week has certainly proven the same. Appeasing the Chinese government on every matter is non- negotiable for the United States based companies; it is a cost they have to pay if they wish to access the country market.

It has been proven time and again that these companies are left with little or no control or freedom to speak on vital issues, the latest of them being the ongoing protests in Hong Kong for democracy.

In other words, China does not need these US companies as much as they need China if they need to manage their bottom lines and profit margins. When compared to the state- backed Chinese firms, the share of US tech giant’s is pale in the market according to data aggregated by Statista.

US Tech Giants trying to survive the Chinese Market
US Tech Giants trying to survive the Chinese Market

For instance, tech giant Google holds only a 3.2 percent stake in the Chinese market as compared to its 88 percent stake in its home country.

Against Google stands, Baidu, a Chinese tech conglomerate that dominated the market share with its 76.7 percent. In order to gain more ground and standing in the Chinese market, Google has attempted projects like Dragonfly which was designed as a censored search engine for China; however it turned out to be a failure.

A similar attempt was tried out by Facebook which keeps getting banned by the Chinese government. Though banned currently in China, Facebook has 2.9 million Chinese users, given that it is still not banned in Hong Kong and Macau. Notably, a 1,1 billion user base is enjoyed by China’s WeChat app, a social media messaging app.

Then options like Uber’s merger with Chinese ride- hailing competitor Didi Chuxing in 2016 come to mind, a step that Uber took after it kept incurring tremendous losses due to the fierce competition with the latter.

Earlier this year, Amazon shut down its Chinese market place owing to its meager marjet share of 0.5 percent in China against the dominating Alibaba’s Tmall and others.

2020-07-17

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