Google's presence in China is limited, but it might finally find its way into the world's largest smartphone market.
Unidentified sources were quoted by San Francisco-based technology media outlet The Information on Tuesday as saying that NetEase Inc, China's second-largest online games provider, is in talks with Google about introducing Google's Play mobile app store into China via a joint venture.
There is no guarantee that this will materialize, according to the sources, who claimed to be familiar with the discussions.
NetEase could not be reached for comment on this. Google declined to comment on questions from the Global Times. However, Google executives emphasized in November 2015 that the company "never left China," and planned to expand its presence.
"China has the world's largest online population and the world's biggest smartphone market, which is too big for Google to ignore," Wang Yanhui, head of the Shanghai-based Mobile China Alliance, told the Global Times on Tuesday.
A report issued by China Internet Network Center in late January said that as of December, the online population in China reached 731 million, equivalent to the EU's total population, with an Internet penetration rate of 53.2 percent. Among these people, 695 million access the Internet via cellphones.
"Seeking a local partner is crucial for Google, which is not familiar with how to reach Chinese online users after years of absence," Zhang Yi, CEO of Guangzhou-based market research firm iiMedia Research, told the Global Times on Tuesday.
Refusing to filter search results, Google exited the Chinese mainland in 2010 in a high-profile gesture of defiance against local authorities, who insist that all domestic or foreign companies in the country must abide by local laws and regulations.
Since then, speculations of Google's return to China have periodically surfaced. In 2015, there were rumors that a censored Chinese version of the Google mobile app store would hit the market in 2016.
Chinese Internet companies like NetEase can become the right business allies to help Google have a better relationship with the authorities, said Wang. "It is harder for Google to get into the market on its own at this moment when the government increasingly tightens control over the Internet."
On Monday, the Shanghai Cyberspace Administration launched a registration program requiring all mobile app stores to register with the authorities when launching, altering or halting their services. This came after the Cyberspace Administration of China in January announced new regulation for app stores, which the administration defined as an untamed frontier with many apps that have been found to "spread illegal information, violate user rights or contain security risks."
In early January, Apple Inc removed the news app The New York Times from its China app store, citing that it had been informed by the Chinese government that the app violated local regulations.
If the talks can achieve something, analysts said it could signify some opportunities for overseas Android app developers.
"But it is hard to tell how big those benefits will be, as China's Android app distribution market is already controlled by third-party stores run by local smartphone brands amid the absence of Google Play," said Zhang.
Google Play's Chinese version must be a censored one and because Google's other services are still limited in the market, it will lack competitiveness in the saturated app distribution industry, according to analysts.
Meanwhile, Zhang believed that if Google Play could successfully get a foot in the door, the company's other Internet services might also come along.
