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If Google Returns to China With Its App Store, Here's What It Will Face

Alphabet as underdog.

Cancan Chu | Getty Images

For many in the Chinese tech world, the official restitution of Google’s business in the mainland is a matter of when, not if.

The how remains in flux, but it’s likely Google will begin by loading its Play Store on the multitudinous Android devices there. The Information reported so in September. Bringing Google’s app store to China, where Apple operates its own, was a topic of conversation internally for years, according to multiple former employees.

The bigger question for Google: Where will it stand if it returns? Figures from TalkingData, a mobile analytics firm in Beijing, show it won’t be at the head of a very crowded pack, which has exploded inside the world’s largest country without Google after its exit in 2010.

Local titans, like Tencent and Qihoo 360, have their own app stores with considerable reach, as do big handset makers. Huawei, a recent Google bedfellow, may be willing to pre-install Google’s app store (which would presumably be censored, like Apple’s). Yet several Android handset makers, chiefly Xiaomi, come packaged with apps that are not Google’s and are unlikely to change course.

“It’s still quite challenging for them to reach a real success in a short period of time,” Ibrahim Dai, head of global business development at TalkingData, said of Google.

TalkingData, which gets its data from some two billion devices nationwide, estimated that the top 20 Internet companies in China control some 90 percent of mobile distribution and volume. (Google Play’s share on the chart above comes from users in Hong Kong and elsewhere outside mainland China, where Google operates fully.)

TalkingData didn’t estimate app store revenues. But other reports, like this from App Annie, suggest that Apple, which commands around 15 percent of the Chinese market, is seeing its biggest app store growth from the country. Google could too; May estimates from Digi-Capital claimed Android outpaces iOS in global app store revenue if you add China.

The market is particularly lucrative with mobile content, a la games and video apps, where Google may have an edge over locals. Play, which is trying to bolster its media offerings to match Apple, could bring a library of games, entertainment and music in demand in China, said Dai. Still, here it faces some deep-pocketed rivals: Four of the top-grossing Android games, per TalkingData, are owned by Tencent.

Also, Google may encounter a more vexing problem: Consumers who don’t know what it is. Its best-known product, search, was pulled along with its servers in 2010. If it returns, Google is likely to focus on futuristic use cases, like voice and wearables — hence its strategic investment in Mobvoi, a Chinese voice search and wearables startup.

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