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Wednesday, 30 May 2007

Why Google Korea Will Fail in South Korea

What is one way to find out news fast? Check out the stories on the social news site, Digg. I just noticed one that caught my eye. It was a story about Google Korea's new 'animated' start page, which looks much better than the regular Google.com homepage. When you rollover the icons along the bottom, little animations appear revealing the Google's other innovative free services, such as Gmail (2.8GB of online storage and the BEST spam filter available), Google Talk, Google Calendar, Google Notebook, Google Toolbar, Google Desktop Search, and Picasa (a simple to use photo organizing software).

This is probably part of Google's plan to get a bigger chunk of the Korean internet search market, as it is currently dominated by the domestic search giant, Naver, which since its inception in 1999, has remained very popular. Naver also has its own email, blog, and desktop search just to name a few services. Another popular search engine portal is Daum, which has risen in popularity since it merged with Hanmail.net, one of the most popular email services.

Although I am a big fan of Google's products and services (Gmail rocks my socks), I believe Google will fail to dominate the South Korean online search market. Why you ask? Things work differently here, as Koreans have an immense amount of pride towards their homegrown products and services, as opposed to foreign companies. Prime examples of these failures? Think Walmart (now E-Mart), French retail giant Carrefour (now owned by E.Land Corp), and recent B&Q's failure to penetrate the Korean retail markets. These large multinationals have suffered greatly and have been forced to sell off their remaining stores in the country to local Korean companies (B&Q is still up in the air). Even automobile manufactures have a tough time in the Korean market. The majority of the cars you see here are either badged Hyundai, Kia, or Samsung.

Considering that South Korea is one of the most wired countries in the world, the people here definitely are web-saavy. If their preference of internet portals is along the lines of their retail choices, then Google might have a higher mountain to climb than expected. Google Korea might take a large number of users away from Naver and Daum (although Google is now working with Daum), but it will never be viewed as the number one search engine in Korea--the people here won't let it happen.

Here is a screenshot of the new Google Korea homepage; notice the icons along the bottom:

Compare this to the "busier" web portals Naver:

...and Daum. Can you spot the odd one out?

What do you think? Will Google be able to penetrate this tough market?


Anonymous said...

I don't understand how come asian sites in general seem to be so packed of characters and info, whereas here, it's so much more sleek and simple...

Yes I love gmail too -- I've been trying to convince my mom that it's the "cool" way to go for e-mail hehe but she still uses her Telus and complains about the spam.


Jeff Kee said...

Natasha - and because you don't understand, and Google doesn't understand is why it will fail.

That's a big difference in taste. A lot of people like to have news and other info linked right away on sites. Look at yahoo's starting page, or msn.com.

Anonymous said...

I think Korea is more about "cool" than being nationalistic. Costco is cool and doing incredibly well. Walmart has never been cool, anywhere
Starbucks,Krispy Kreme and Outback are cool MacDonalds still outdraws Lotteria by a wide margin. People will ooh and ahh over a 7 Series BMW-not a Chairman.
I think Google is the coolest thing in cyberspace right now, so I think it will succeed in Korea. But the others aren't going away either.

Michael Kwan said...

Realistically, I think the same can be said about the search engine game here in North America. Compare Google's home page with that of Yahoo or MSN.

Gary said...

Natasha: It's hard to convince some people that Gmail would be a better solution, especially once they get comfortable with another email service. I've tried to turn my dad over to the dark side, but he likes Hotmail because he doesn't want to learn how to use email all over again!

Brian: Sure, some Koreans may like "cool" but I think it's more about image, status, and perception here. Koreans like having the best things, especially when it comes to cellphones. Samsungs and LG phones are wayyy more popular than any other brand (made in Korea of course). Look at the cars...I wouldn't call Hyundais "cooler" than BMWs or Audis but everybody loves them here.

As for Costco...the reason it is succeeding I think is because of the membership. People think it's an "exclusive" thing, plus after talking to a Korean friend he says the prices are much cheaper for groceries (I think it's still expensive). As for Walmart's failure, he told me that people thought their store layout was bad, and that everything in there was too cheap. Koreans like things to look pretty and nice--it's that image and perception all over again. It's like seeing women all done up in make up and heels--to go grocery shopping at 11pm!

Jon Allen said...

I think Google certainly has it's work cutout.

Most TV and adverts and posters have the Naver or Daum keywords in a prominent location.

However it's linkup with Daum is possibly the key here. A less obvious way of getting in to the market and maybe, one day, taking over?

Yahoo Korea once had 44% of the search market but is now down to 4%, so just because Naver and Daum are the biggest sites at the moment does not mean they will continue that way.

annamatic said...

I'm a designer, so maybe it's just me being stubborn, but I don't think that more visual clutter is necessarily "what the people want." I do think that they want easy access to the things that they personally need, and a lot of companies just don't know how to deliver that.

Google's clean look reads as "plain" and lo-tech here, so I don't think that making gratuitously animated icons is really going to solve their problem. But Koreans might go for the new personalized iGoogle homepages with themes, if someone were able to develop some add-ons and widgets for the Korean market. Imagine a Cyword add-on where you could see which of your favorite Cyworld pages were updated! Or a Naver Weather add-on! I think Google has a chance here, but now that they are like the world's biggest internet company, they can't just sneak by with their "oh, it's just little old us..." blank white page anywmore...

Unknown said...

Anonymous, it's because Naver and Daum are portal sites. Google is still known as being just a search engine.

Anonymous said...

Wow, you seem to understand Koreans very accurately. I'd assume that most foreigners wouldn't notice anything like sentimentality, etc. in a foreign country.

Roy said...

I don't think that the busier argument is qualified. Google's success was primarily because it was simpler and cleaner, unlike its competitors - Yahoo and MSN and, most importantly, it's ability to actually find what you're searching for.

Anonymous said...

Korea is very strict when it comes to there country most would be angry if someone of a different ethnic background would break through there entertainment world because they see it as taking away rice from a native korean- I've been to Korea it was nice and fun but a homogenous country like Korea scares me, friends that I talk to say most would not but cars from other countries because they would look like a traitor taking money away from theyre country. It took awhile but I understood what she meant, most are still not tolerant of people of color since they are not a well diverse country and still hold bitter issues inside them, like the Japanese occupation-American Beef, funny they get mad at AMerican Beef but when they found bird flu did america ban korean chicken or ban going to korea-they like to bring the mad cow issue from 5 years ago why dont we go several years back when Americans died to prevent them from having Kim Jong as their leader

Anonymous said...

Hanmail is designed for Koreans. Like everything else in Korea, it is completely incapable of imagining or adjusting to anything non-korean (the Japanese pop-culture invasion not-withstanding). But what really frosts me is the way every single Korean websites wants me to download their active-x control or join with my (non-existent) Korean I.D. card if I wish to check tomorrow's weather.

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