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 The Google Play app store would be set up specifically for China,
and not connected to overseas versions of Google Play, two of the
people said.
They said Google intends to comply with Chinese laws on filtering
content that might be viewed as sensitive by the ruling Communist
Party, and laws requiring the company to store the app store's data
within China.
A Singapore-based Google spokesman declined to comment.
Google largely pulled its services out of China five years ago after
refusing to continue self-censoring its search results. It has
maintained a limited presence in the world's biggest smartphone
market, but most of its services, including Play, have been rendered
borderline inaccessible.
The U.S. company would use a successful app store as a launch pad to
place other products and services in China, said two people familiar
with Google's thinking.
They said, however, that the company has not settled on which
product might come next.
Chief Executive Sundar Pichai and other top brass have made no
secret that the company wants to get back into China, and Google
Play would likely be its first foray.
But critics say Google has lost basically all ground in most of its
major services, especially search and video streaming, to Chinese
players.
The biggest competition might come from products on the wrong side
of the law, said technology analyst Rob Enderle.
"There are a substantial number of free ways people get music in
China that makes it difficult for any service, especially from the
West, to get into the market," he said.
BREAKING THE ICE
For Google, having a product in China would be a symbolic gesture to
show that the company values the market, said Shen Si, CEO of
Chinese mobile advertising company PapayaMobile and a former Google
employee.
"If they want to break the ice with the Chinese market then they
have to pick a pretty important product to make available to the
Chinese people and make it really localized," she said.
"Google Play would be a really good product for that because it's
not very sensitive."
Chris MacDonald, a business ethics expert at Toronto's Ryerson
University, agreed Google Play was a safer bet than search or Gmail
in China but said Google should take its time deciding what product
to bring to the market next.
"Which ones involve the least consumer data? Which ones are least
likely to be politically sensitive or serve as a means of expression
for political dissidents?" asked MacDonald.
If Google wants to penetrate the Chinese market in a meaningful way
it has to be led by search, said Enderle.
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"How do you use YouTube without search? Everything they've got
hinges on search. In the end if they can't get search in everything
it is going to be even more crippled than it already is," he said.
Google has had its employees working hard in China to lay the ground
for the app store's launch, said one of the people with knowledge of
executives' plans.
The U.S.-based firm is hoping to launch Google Play in China some
time after Chinese New Year in February next year, and before early
summer, that person said. Another person at a company in China that
works with Google said the store will go live in 2016.
The company hopes the app store will include as payment options
Alipay, the online payment service from Alibaba Group Holding Ltd's
<BABA.N> finance arm Ant Financial Services Group [ANTFIN.UL], and
Tencent Holding Ltd's <0700.HK> WeChat Payment, said the person
familiar with executives' thinking.
Rather than requiring explicit approval from China's government to
launch the app store, Google just needs to comply with Chinese laws
including those governing data storage and content filtering, the
person added. That was echoed by PapayaMobile's Shen.
Spokeswomen for Ant Financial and Tencent declined to comment.
TOO BIG TO IGNORE
China is too big a market for Google to ignore. Apple Inc <AAPL.O>
complies with local laws and made $58.7 billion last in the year
ended Sept. 26 in Greater China, which includes the mainland, Hong
Kong and Taiwan, making it its second-biggest market.
Last month, Google said it would take a minority stake in
Beijing-based artificial intelligence firm Mobvoi as part of a $75
million fundraising round, as the U.S. search giant tries to rebuild
its presence in China.
Because services like its search, e-mail and mapping are blocked in
China, the U.S. firm is trying to cement partnerships with domestic
providers like Mobvoi, which offers technology similar to Apple's
Siri and Google's own version.
(Additional reporting by Deborah M. Todd; Editing by Keith Weir and
Bill Rigby)
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