A Blog by Jonathan Low


Jan 3, 2018

How Alibaba's Browser You've Never Heard Of Could Dethrone Google

Once again, designing specifically for mobile usage patterns and economics pays off in consumer acceptance, leading to stronger growth over established players. JL 

Newley Purnell reports in the Wall Street Journal:

A mobile browser has outflanked Google’s Chrome in Asia’s fastest-growing markets, giving Alibaba an advantage to capture the next generation of internet users. People in India, Indonesia and other emerging markets getting online for the first time are picking UC Browser (because of) its tiny app size and portal approach to viewing content. New web surfers prefer apps that don’t take space on their phones, an insight UC caught early. Many smartphones in Asia have 12 gigabytes of storage, half the global average.
A mobile browser rarely used in the West has outflanked Google’s Chrome in some of Asia’s fastest-growing markets, giving owner Alibaba Group Holding Ltd. an advantage in the race among technology giants to capture the next generation of internet users.
Hundreds of millions of people in India, Indonesia and other emerging markets getting online for the first time are picking UC Browser, owned by Chinese e-commerce giant Alibaba, over ones made by U.S. rivals. Users say UC Browser works better in countries dominated by low-end smartphones and spotty mobile service.
“It’s faster, it takes up less memory, and it looks better” than Chrome, said Rizky Ari Prasetya, a 20-year-old Jakarta resident who recently ditched Chrome for UC Browser.
India and Indonesia are among the last, great untapped markets for internet users. Just 30% of India’s 1.3 billion people are online, and only 25% of Indonesia’s 260 million use the web, according to the International Telecommunication Union, a United Nations body.
UC Browser, which has more than 430 million users world-wide, accounted for 51% of India’s mobile browser market over the past year, compared with 30% for Chrome, according to web analytics firm StatCounter. In Indonesia, UC Browser led Chrome by 41% to 32% during the period.
Chrome has more than a billion users world-wide, according to Google, and it has some 47% global market share versus UC Browser’s 16%, according to StatCounter. In the U.S., Chrome has 39% market share, behind Apple Inc.’s Safari browser, which has 52%. UC Browser has less than 1% market share in the U.S.
Chrome has a higher market share than UC Browser in some smaller but fast-growing Asian markets, such as the Philippines and Vietnam, according to StatCounter.
UC Browser, known for its orange squirrel logo, launched in 2004, giving it a head start. Google unveiled its Chrome browser for computers in 2008, bringing it to its Android mobile operating system in 2012.
One reason for UC Browser’s success is its tiny app size and portal-like approach to showing news, scores from sports like cricket and soccer and other content. New web surfers tend to do more through their browsers, and they prefer apps that don’t take up much space on their phones, an insight UC Browser caught onto early.
Many smartphones in Asia’s developing markets have just 12 gigabytes of storage, half of the global average and far below the U.S. standard of 32 gigabytes, said Neil Shah, an analyst with research firm Counterpoint.
The UC Browser app takes up 31 megabytes of space, compared with Chrome’s 125 megabytes, said Tiago Costa Alves, Asia Pacific vice president at independent Android app store Aptoide.
One market UC Browser hasn’t conquered is its own. In China, where many smartphones run on Android, Chrome has 54% of the mobile browser market compared with UC Browser’s 17%, according to StatCounter.
UC Browser strives to be “the first window to view the internet” for new web consumers by letting them surf the web using fewer clicks and less data, said Damon Xi, the Alibaba executive overseeing UC Browser’s expansion in India and Indonesia.
Mr. Xi said the company’s research has shown that in addition to a smaller app size, users need features such as data compression and ad blocking to conserve mobile bandwidth usage.
Google appears to be taking notice. In 2017 alone, its next billion users group, which targets emerging markets, has made more than 40 tweaks and launches of products. Some recent updates to Chrome include making the app and its data usage smaller and adding icons on the home screen that can be clicked to visit popular websites rather than having to type in web addresses, two features UC Browser has offered for some time. Those adjustments may be working, with Chrome’s market share in India and Indonesia increasing in recent months, according to StatCounter.
A spokesman for Google, a unit of Alphabet Inc., declined to comment.
Any migration away from Google’s built-in browser is bad news for the search king. Chrome funnels users to Google’s search engine and its accompanying advertisements, and Chrome users are more likely to use other Google services like Gmail and cloud-storage platform Google Drive, said Neha Dharia, an analyst at research firm Ovum.
While UC Browser doesn’t prohibit users from accessing Google search or services such as YouTube and Google Maps, they tend to use them less than Chrome users, analysts say, because they typically return to the browser. UC Browser also makes money through advertising.
Mobile advertising spending in Southeast Asia is set to more than double from about $860 million in 2017 to $2.2 billion in 2021, according to research firm eMarketer. Indian mobile ad spending is projected to rise from $460 million to $1.73 billion during that time. While that is a small sum compared with the $58 billion spent in the U.S. alone in 2017, the browser could give Alibaba an advantage as it looks to tap Asia’s burgeoning markets.
Faced with maturing growth and domestic rivals in China, Alibaba is seeking growth in India and Southeast Asia, where it increasingly sees competition from U.S. companies such as Google and Amazon.com Inc.
Alibaba last year took a controlling stake in Singapore-based e-commerce firm Lazada Group, an online selling leader in Southeast Asia that competes with Amazon, which launched in the city-state in July. In India, where Amazon has made rapid progress after pledging to invest $5 billion in the country, Alibaba has injected cash in its local competitor Snapdeal.com.
One potential challenge to UC Browser’s continued popularity involves concerns over how, as a Chinese firm, it handles users’ data. Chinese technology titans such as Alibaba speak openly about cooperating with authorities on security and law enforcement issues, while U.S. firms often resist U.S. government requests for information. In 2016, Citizen Lab, a Toronto-based human-rights research group known for its studies of internet censorship and surveillance, said there were privacy and security issues with how UC Browser transmitted data. Mr. Xi said UC Browser takes “security and privacy issues very seriously.”


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