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China has seen a wave of new internet companies, actually succeeding. A surprise after Google, Facebook, Twitter saw them locked out. Business analyst Ben Cavender tells in Quartz what the trick is: complying with the Chinese government. Names? Evernote. LinkedIn. Uber.
Quartz:
After Google’s exit, those three firms have yet to come back. But in recent years, other American internet companies have found a degree of success in China—or at least a bit more stability than their predecessors.
The solution involves sacrifice—hand over data and control, and the Chinese government will hand you the keys to the market.
“If you want to develop an internet business in Chinese now, you have to be willing to work with the Chinese government, even if that means censoring content or sharing access to your data,” Ben Cavender, principal at the China Market Research Group, told Quartz…
By now, some may say that question sounds downright passé. Google and Facebook, the posterboys for internet companies shut out of China, are now knocking on its door. Facebook has reportedly opened an office in Beijingand aspires to develop a consumer-facing product. Mark Zuckerberg’s China infatuation seems carefully staged. Google, meanwhile, is rumored to be working on an app store for China, as a way to reach consumers without relying on its search engine.
“Google decided to take a stand, and they effectively locked themselves out of the market,” Cavender said. Businesses must ask, “How important is China to our growth and what is our long-term perspective on what to do there?” he adds.
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