It's very hard to find many success stories involving U.S. tech companies finding success in China. Alphabet Inc GOOG and Google closed its search engine and left the country in 2010, Apple Inc. AAPL is getting killed, and Facebook Inc FB hasn't been given the chance to enter the market in the first place.
The latest victim of an American company looking to find fortunes in China? Uber.
According to Bloomberg Gadfly's Shira Ovide, Uber realized what companies like Google and Facebook learned a long time ago - China is merely an "alluring trap."
Uber lost billions of dollars in China and recently struck a deal to sell its Chinese unit to Didi Chuxing, China's version of Uber and its main competitor in the country.
Related Link: Didi Chuxing Confirms Acquisition Of Uber's China Unit
Ovide stated that China's state-backed internet companies are "powerhouses" that are "too huge to dislodge" and "unimaginably big and broad." After all, their close ties to the government naturally "tilts the rules" to favor their own companies. Meanwhile, these companies actually manage to design and create smartphones that are at least as good as their American peers but are better tailored to local tastes.
With that said, it might be time for U.S. tech companies to stop trying to "crack China."
"The might of Chinese internet superpowers, their tech prowess and government help has hardened China into an online economy where locals rule," she said. "China seems too big to ignore - but it is also too hard to crack for America's web prowess."
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.