China Search Engine Market in Stable Stage

According to the latest data on China search engine market released by iResearch, GMV of China search engine market hit 7.41 billion Yuan in Q1 2013, falling 6.8% compared with Q4 2012. Meanwhile, YoY growth rate of China search market was 35.0%, which kept decreasing in the past sequential six quarters and was lower than that of China online advertising market.

iResearch analyzed that China search engine market was in the maturity stage with growth curve increasingly smooth. The causes of the decline can be concluded as follows. Firstly, search engine traffic shrank during Spring Festival due to the decrease of users’ online time spent. Also, advertisers’ budget was decreased by seasonal factors during Spring Festival. Secondly, PC search engine was in the decline stage, when the traffic was shunted by mobile Internet and vertical websites (like Taobao). Thirdly, traffic monetization ability of mobile search was weaker than PC search, due to a small number of mobile search advertisers and small size of advertising.

Structure of China search engine market share kept stable, and 360 Search occupied 0.3%.

In Q1 2013, Baidu still took the top position among China search engine operators with the share of 80.6%, slightly increasing from 79.7% in last quarter. The share of Google encountered a slight decrease, accounting for 14.4%. Sogou and Soso kept stable share of 3.1% and 1.6% separately. 360 search initiated monetization process with the share of 0.3%.

iResearch analyzed that share of China search engine market remained stable. Because 360 Search just started monetization process and its market share was very small, it still could not exert significant influence on the whole market structure yet. However, it is expected that revenue of 360 Search will grow rapidly and its market share will also largely increase because 360 Search traffic have been accounting for above 10%.

It is estimated that growth rate of search market tend to decelerate.

iResearch analyzed that China search engine market stayed in health condition and was of great growth potential. However, PC search traffic was obviously shunted to mobile search and mobile search traffic monetization ability was weaker than PC search. Besides, it will take some time to attract advertisers to mobile search terminals, which will affect revenue increase of search companies in one or two years. iResearch expected that the growth rate of China search engine market revenue will be between 33% and 35% in Q2 2013.


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