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Strategies for Underdogs: How Alibaba’s Taobao Beat eBay in China

How did underdog Taobao displace eBay in China, and how will it monetize its marketplace for future success?

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In 2007, Alibaba’s Taobao became China’s leading consumer e-commerce marketplace, displacing the once dominant eBay. How did underdog Taobao do it? And will it be able to find a way to monetize its marketplace and ensure future success?

Harvard Business School professor Felix Oberholzer-Gee discusses his case, “ Alibaba’s Taobao ,” and related strategy lessons from his new book, Better, Simpler Strategy: A Value-Based Guide to Exceptional Performance.

HBR Presents is a network of podcasts curated by HBR editors, bringing you the best business ideas from the leading minds in management. The views and opinions expressed are solely those of the authors and do not necessarily reflect the official policy or position of Harvard Business Review or its affiliates.

BRIAN KENNY: According to Smithsonian magazine, Dan Kohn, founder of NetMarket, conducted the first end-to-end online sales transaction, when he sold his CD of Sting’s, “Ten Summoners Tales” to a friend in Philadelphia for $12.48, in 1994. It was an inauspicious beginning to what has become a $1.7 trillion global industry. According to retailer.com, 50% of e-commerce sales were made through online marketplaces in 2019. A number that is expected to grow rapidly in the coming decade. Digital natives could be forgiven for assuming that it’s always been this way, but of course, like every other disruption in business, the evolution of e-commerce has involved fierce competition and strategic gamesmanship between global players on a rapidly changing landscape. And to the victor go the spoils. Today on Cold Call , we welcome professor Felix Oberholzer-Gee to discuss his case, entitled, Alibaba’s Taobao . I’m your host, Brian Kenny, and you’re listening to Cold Call on the HBR Presents network. Felix Oberholzer-Gee is an expert on competitive strategy and international competition. He is the author of the newly published book, Better Simpler Strategy, a Value-Based Guide to Exceptional Performance . He’s also a podcaster, he’s the co-host of a fabulous podcast called After Hours . Along with other HBS faculty, Youngme Moon, Mihir Desai, and various guests that are popping in and out. It’s one of my favorite shows. Felix, I’m thrilled to have you on Cold Call today. Thanks for joining me.

FELIX OBERHOLZER-GEE: It’s great to be here. Thank you, Brian.

BRIAN KENNY: What I really want to do is use this case that we’re going to talk about today as a way to hear about some of the ideas in your new book. I know that the case is a good stepping off point for that. The book is about strategy and that’s something that you think deeply about and that you teach about here at the school. I think people will really enjoy listening to the story about Taobao, which is part of Alibaba. Let’s just dig in. Tell me what would your cold call be to start this case in the classroom?

FELIX OBERHOLZER-GEE: Like many faculty members, I have a few go-to cases that I just love teaching. I must have taught the Taobao case dozens of times. If I could teach it tomorrow, I definitely would. It’s a case about an underdog in an industry landscape that is typically dominated by big platforms. Of course, we’re thinking of Taobao as China’s equivalent of, perhaps, Amazon today. But at the time of the case in the early 2000s, eBay, interestingly was dominant in China. Just like it’s almost unthinkable how you might compete against Amazon in the United States, it was almost unthinkable how you might compete against eBay in China at that particular time. Then, of course, Alibaba did it. And Taobao is now the top dog, faces new competition, interestingly also, in China today. But it’s a story of being the small player, the small company in a market that is dominated by a big platform. The case develops an idea, that is featured prominently in the book also, what I often refer to as “Strategies for Underdogs,” what can you do that the big player cannot easily imitate?

BRIAN KENNY: This case takes place in the mid-2000s into the early 2010 timeframe. How does it relate to the questions that you try to answer as a scholar and, importantly, how does it surface in the book that you’ve just published?

FELIX OBERHOLZER-GEE: The big question is really how you compete as a smaller player against the big platform. The big platforms, and this is a theme that I explore at length in the book, the big platforms, they all benefit from what we call network effects. Network effects are a mechanism that renders a platform or a business, or a product more valuable if more people use it. Imagine, you’re the only person on Facebook, it’s not such a great experience. The more people join, the more valuable it becomes. The question then is, “If the big platform is so far ahead, what can you do to catch up?” The Taobao versus eBay story set in China explores the possibilities. Taobao uses really two things I think that I see in lots of other markets, and that I describe in the book also, about how smaller platforms can compete. The first idea is really the big network benefits from an increased willingness to pay. Willingness to pay, one of the key strategic variables in thinking about competitive strategy, is the most a customer would ever pay for a product or a service. If my company benefits from network effects, that’s elevated irrespective of the quality of the service or the attractiveness of the platform to begin with. So, the smaller player needs to think about, “How can I increase my customers, my client’s willingness to pay without having the benefit of scale?” For instance, if you have an idea that involves significant fixed cost, that’s probably not a leading candidate to compete against the big platform, because the big platform can spread fixed costs much more easily than you can. Not surprisingly, what we see Alibaba do, is implement a whole range of ideas that are essentially low cost or variable cost, so that the big platform, if it decides to imitate, doesn’t have a natural advantage in this imitation process.

BRIAN KENNY: For people who aren’t familiar with Alibaba, maybe you can describe them before we dive into those details. What is Alibaba? And a little bit about Jack Ma too, the founder. He’s a colorful character.

FELIX OBERHOLZER-GEE: Yes, certainly. He’s a teacher originally. The first really big business that he built is Alibaba, the name of the group today. Alibaba is really a B2B business. It allowed many smaller and medium-sized Chinese companies to start selling online. Start selling online domestically, that was important. But I think even more important is selling internationally, because it wasn’t easy for Chinese businesses at that point in time to reach their overseas customers. When you think about just how dramatically important exports are for the Chinese economy, in part, this was facilitated in a really big way by Alibaba. eBay and Alibaba didn’t really touch one another for quite some time, because ebay, just in the US, was mostly a consumer oriented site, and Alibaba competed in this B2B space. Then, in the Chinese context, eBay had a really quick increase in what they call power sellers. Power sellers are people who are essentially middlemen. They look a little bit like individual customers, and they look a little bit like an actual B2B business with B2B transactions. Naturally, Jack Ma, was very concerned about eBay encroaching on Alibaba’s turf. That triggered the response that, interestingly, during the SARS epidemic, he decided, “We’re going to build a business called Taobao,” which means “hunting for treasures”, that is squarely in the C2C space. The team that developed the business was locked up in Jack Ma’s apartment in Shanghai. They couldn’t go outside just like during COVID we can’t go outside, because SARS was potentially even more fatal than COVID-19 today. So, they used that period of time when they had engineering resources that couldn’t really go anywhere. They used that period of time to build a competitor.   eBay had 85% market share at the time. So, how on earth would you ever compete? The case, essentially, allows students to see what kinds of variable cost ideas that a company might have, in order to increase its customer’s willingness to pay. The discovery is that it’s a different design. It’s a whole suite of features that are, interestingly, not really directed at eBay’s customers in the first place. This is early days of the internet. It seemed mildly crazy to buy something online. Many people waited on the sidelines. In the book, these groups of people I call “near customers.” They’re almost in the market, but not quite. Their willingness to pay, it’s just slightly shy of the price that you would have to pay. It has to do with lots of concerns. I’m giving someone my financial information. Maybe are going to send me the packet that I ordered. Maybe you’re not going to send me the product. Maybe the product will be broken. Taobao developed a whole range of features that essentially built trust among near customers. That has two effects. One is, you’re not really fighting for the same group of customers that eBay already owns. That’s much easier to do than luring customers from a big platform that benefits from network effects. It solves a major issue in the development of e-commerce. In fact, that market, the market that Taobao targeted, ended up being so much more important than eBay’s market and eBay, eventually, you might remember they left China.

BRIAN KENNY: Let’s talk a little bit about Meg Whitman and the way that she was sizing this whole thing up. eBay, at this time, already had expanded into the European market. They were obviously … they were founded in the US, so they had cornered that space. How were they thinking about the China market? What did they think the opportunity was there?

FELIX OBERHOLZER-GEE: They were extremely optimistic about the prospects of eBay in the China market. They had made a minority investment first, in a business that was built by two HBS graduates who started Taobao. Then eventually they took over the company. If you look at the China market, everything looks perfect. It looks like we have deep local knowledge because we have these two local founders who really understand the local market. We have 85% market share, which is decisive if you think about competition between different platforms. In public statements, Meg Whitman is just very optimistic. China is eBay’s to lose. There isn’t really competition in sight. One of the really interesting dynamics that we end up talking about in the classes, if the entrant goes after near customers, that’s not something you easily see in your own data. You don’t realize that someone else is catching up on you because that someone else is actually not exactly catering to the people you serve, to begin with. By the time you notice that someone else, Taobao, is actually so big that now the network effects tip what used to be this wonderful protection that eBay had, in that they had the biggest network effects, now turns against them because they’re relatively small and Taobao has a greater customer size, has greater network effects. So, there’s really two ideas that are at the center of the case. First is the idea that if I compete against someone with network effects, I need to find alternative ways to build willingness to pay over time. I need to do it in a cheap, variable cost matter. The second idea is, if I go after near customers, that’s actually much more promising, much easier to do. In particular, it’s not so concerning for my rival because you don’t actually see in your data what is happening, possibly until it’s too late.

BRIAN KENNY: How important is local knowledge to this case? In other words, Taobao, obviously they’re from China, they understand the Chinese culture. They understand the buying habits of Chinese people. The case alludes to eBay going into Japan, and having a rough go of it. And I’m wondering what do they take away from that? Did they do anything differently when they went into China, or should they have?

FELIX OBERHOLZER-GEE: It’s a beautiful example of strategic learning. I usually start the class by asking everyone, “What happened in Japan?” eBay, globally. So many markets, so successful. Then, all of a sudden, you strike out in Japan and that discussion builds two insights. The first one is this network effect story, so that everybody knows about the importance of network effects for these platforms. The second insight is really the insight around just how important local knowledge is. For instance, eBay was completely used to using credit cards. Japanese customers, cash on demand. The eBay model is essentially ‘used products’ model in the United States. Everything that’s been sitting in your garage for a long time and you haven’t had a chance to think about it. That’s a prospect for a sale on eBay. In Japan, people were interested in new products. No one was interested in the second hand or rarity products. There is a particular amount of local knowledge that you need in order to be successful. What’s really beautiful about eBay’s strategy, is when you see … They lose Japan, and then when you see what they do in China, they buy a local business, started by our alums that has 85% market share. That, of course, gives you this amazing confidence that there’s really nothing that can go wrong. Because, now you have both of these things. You have network effects, and then you have local knowledge, and you should be just okay until you’re not, because you have a rival that competes in very smart ways.

BRIAN KENNY: There were some pivotal decisions that the Taobao team made early on, as they were moving down this path and they set their sights on eBay. Can you describe what some of those important strategic calls that they made early on were, and how they impacted the trajectory of Taobao?

FELIX OBERHOLZER-GEE: One major decision was to organize the Tao website in the exact same manner that Chinese department stores are organized. The reason why this is important, is remember we’re trying to cater to these near-customers that are nervous about buying online. If I go online and I look at the website and now, “Oh my God, I know how things are arranged here.” This is exactly what the Chinese department store looks like. That’s of course a big advantage. Then, really, one of the most important things that they did was the creation of Alipay. Alipay is essentially an escrow service. The seller of a product is not being paid until the recipient acknowledges that he or she has received a product.  In a low trust environment where the internet was relatively novel, that played an enormous role. In the book, I call this a complement. A complement is a product or a service that increases willingness to pay for something else. That was really a key decision, that every company that has complements needs to very carefully think about, “Do you provide these complements just for your own product?” Then that means you have a leg up in the market relative to the competition, “Or do you provide it for the entire market?” In which case you help the market as a whole grow. Let me give you an example. Tesla superchargers, you have a choice. You could make these chargers so that they only charge Tesla cars, in which case Tesla has an advantage against all the other producers of electric vehicles. Or you could decide, “No, actually the big problem with electric vehicles is that we don’t have enough charging stations period.” So, you make it available to everyone. That really fuels the market as a whole. It does away with that relative advantage, but it fuels the market as a whole. In the case of Alipay, very smartly, and after a hot internal debate, Alibaba decided to make Alipay available to everyone. Then, from there, it grew its financial services business, which is probably now as valuable as the remaining e-commerce businesses that they’ve built over time.

BRIAN KENNY: That’s amazing. It also makes me think of PayPal, which I think started as an eBay service, and has now being used across all these other platforms. Is that a fair comparison?

FELIX OBERHOLZER-GEE: That’s right. When eBay purchases PayPal, the idea is exactly this idea of a complement. That’s something that is an interesting decision to make. Do you want a complement to be in-house, or do you want the complement to be provided by someone who’s a different entity, possibly by lots of different entities? Think of Apple. It used to be all the profits came from the hardware side. Now, all of a sudden, we see such a dramatic increase in the profits that come from the software side. That’s the power of complements. You get to shift profit pools back and forth, essentially responding to competitive pressures. As long as you are way ahead in hardware, you make all your money on hardware. When that’s a little less obvious, you start making money on services. You see the same within Amazon. You see the same within Alibaba group. This is now, literally, dozens of companies with dozens of opportunities to shift profit pools among these companies, in really interesting ways. That’s maybe the third big lesson, other than network effects, near customers, is just the importance of these complements to make your company grow, and to put your company in a favorable competitive position in the market.

BRIAN KENNY: Those are great examples. I’m wondering in the book, you must provide some other examples of companies that have faced similar scenarios as Taobao was facing, these underdog firms. Are there any that you can share with us? We still want people to buy the book by the way.

FELIX OBERHOLZER-GEE: There’s a really interesting example that involves Facebook. Facebook, obviously, building a small business first, which is a little counterintuitive. Social networks have these network effects. Why on earth would you restrict who can be on Facebook to begin with? In the beginning, it’s literally only Harvard, then it’s the Ivy League universities. Then they grow very slowly. The intuition here is that if you target a particular subset of the market where people highly-highly value being connected to one another, that can be as powerful. It can be as successful as being an average platform where you meet lots and lots of other average people. You value connections, but there’s nothing particularly special. You see this in social networks, you see this in dating platforms. We have interesting differentiation strategies, depending on to what extent you cater to a niche, and to what extent you build one platform serves all kinds of businesses that then benefit from network effects.  But the network effects are not super-super strong, because I don’t highly value being connected to people in Norway, because I don’t know anyone in Norway, as opposed to all, the platform is relatively small, but I value everyone else who happens to be on this platform. It’s a counterintuitive way of building platforms, where the fact that you’re small, the fact that you’re niche, actually ends up being an advantage, at least in the early days of building the business.

BRIAN KENNY: Yeah. We’ve had several episodes of Cold Call where we’ve talked about platform companies. It’s an increasingly important aspect of the landscape these days in business, or these marketplaces. Do you think, is it easier now for an underdog to penetrate a marketplace, to penetrate the big players in the space because of the internet and the asset light nature of businesses that are marketplaces? Could you have done this with some of the more mature industries that are more asset-based?

FELIX OBERHOLZER-GEE: We used to be super optimistic that essentially any platform business will be winner take all. The entire Silicon valley enthusiasm for no profits but lots of growth, rested in good part on this notion that eventually you be completely dominant because these are all winner-take-all markets. Now, you see time after time after time. Well, winner take most, but probably not winner take all. The question is, “What is it about the platforms that gives them significant power, but makes them not be a clear winner that would then allow you to raise prices and create really great returns for the original investors?” There are a few things. Geography is one. If you’re Uber, you have to fight for every market individually. If you have lots of drivers in San Francisco, that doesn’t really help us in Boston because we’re not in San Francisco. There is that interesting differentiation place that we just talked about in the context of Taobao and the Facebook story. Then, there’s also something that I often describe as the implicit orientation of a platform. The best example that I can think of, is competition between Amazon and Etsy. When Etsy, the handmade, hand curated platform, when Amazon enters their space by creating Amazon handmade, people are super pessimistic about the likelihood that Etsy can survive. Why? Why all the network effects are on Amazon side. Now, of course, we know, oh my God, Etsy has done so incredibly well. What’s different about the two? Amazon in the end is always in the customer’s corner. Every contentious decision, every big decision that they make is really with amazing focus on customers. Etsy, much more focused on makers, much more focused on the producers on the platform. So, you get the type of differentiation that doesn’t really … In many ways, they’re close substitutes, but it’s just enough differentiation that actually there’s room for both companies in the marketplace. So, that’s a third reason. I have a chapter in the book that is called Strategies for Underdogs, which essentially talks about all of these different ways that smaller platforms can survive. But the upshot is, of course, that investors’ expectations that may have been led by … In a few years, this platform will be globally dominant or will be dominant at least in the North American or in the Chinese market. Those expectations are often disappointed now because people have become really smart, and they’re building small, powerful businesses that then limit the opportunities for the really large platforms.

BRIAN KENNY: This has been a super interesting conversation. I’ve got a couple more questions before we let you go. I want to go back to the Taobao case for a minute, because one of the central questions in the case has to do with the revenue model of which Jack Ma is quoted in the case, I think is saying, “We don’t have a revenue model.” I’m just wondering, I know there’s a B case about this. Can you talk a little bit about what they attempted to do and what the reaction was by the customer base?

FELIX OBERHOLZER-GEE: Often as a small platform, your fees, your price is zero. Because otherwise you don’t stand a chance to begin with. Then once eBay leaves, of course, there’s the question, how are you going to make money? That question is pretty important because, at that point in time, Alibaba is a publicly traded company in Hong Kong and Taobao is privately owned in China. So, you’re writing a check to a private entity which is never the easiest thing to do. It easily raises a shareholder suspicions about what’s going on. Their first idea is to auction off spots on the website. A little similar to the classic Google model with one twist. Iif you click but don’t buy, then you don’t have to pay the fee. It’s a classic auction, but you don’t owe Taobao anything, unless you actually get a benefit as the seller, which was an interesting model to think about. When they introduced it, as always on the internet, once you raise prices, it was enormous backlash. But what was interesting about the response, was that about 40% of the market or so, they actually liked that kind of a model. When they dug a little deeper and looked at the motivations for people to favor, or disfavor, this new monetization scheme, they saw that there’s a substantial portion of the market that believes, maybe rightly so, maybe not, we don’t actually know, that the companies that bid high on these auctions, they have higher prices and they have higher quality products Taobao seized on the data, seized on this insight, and created what’s now called The Mall, the TMall, which is essentially just Taobao at higher prices with better quality, and then an easy monetization model that essentially monetizes the sellers on the market side. That then was really, financially speaking, the big breakthrough that made the company really successful and really valuable. It was smart interpretation of the data that they got back that then helped them figure out what’s a really promising monetization model, given the peculiar circumstances in the Chinese market at that point in time.

BRIAN KENNY: Just bolsters the argument that we continue to hear about data analytics and how important they are, how important it is to understand the numbers that you’re looking at, and how they inform decisions that you can make.

FELIX OBERHOLZER-GEE: Asking your customers about important strategic decisions, which is not that common. We typically think, AB testing some small element on the website, yes, of course we’ll easily follow customers. But making big decisions about, “How do you monetize? What does your strategy look like?” It’s much less common to really, truly directly take customer feedback the way Taobao had done this, but which turned out to be, in this particular case, really-really successful.

BRIAN KENNY: Felix, we have time for one more question with you and what I’d like to know is, as people hear you talk about this case, what’s one thing you’d like people to take away from the case? What’s the big lesson here?

FELIX OBERHOLZER-GEE: There’s all the tools, obviously. There’s understanding, willingness to pay, understanding network effects, understanding near customers. But there’s also an interesting moment in the case conversation. Students, essentially, make the argument that eBay loses the Chinese market because they don’t understand the Chinese customer. Taobao, it’s more local. They have all the insights and it’s not surprising that they win. Then we look a little more closely in the case and we see an early landing page for Taobao. And the landing page looks nothing like a landing page in China needs to look at to be appealing to customers. One of the things that we talk about in the class, is that you often have these priors, these insights that you think, “Yes, the local company knows better, or the foreign company is at a disadvantage because it’s not quite as close to customers, or because it has to coordinate activities with headquarters in San Francisco.” Then before you know it, once you have a strong prior, you just exclude all the information that is inconsistent with what you believe. That’s a really nice experiential moment. Of course, we all know confirmation bias is prevalent, and you can give a lecture on confirmation bias and students will nod, it’s not going to change anything, I don’t think. But if you can create an experience in the classroom where you can show everybody … Sometimes it’s interesting. Even once some students see that they suffer from confirmation bias and they interpret the data correctly, many others will not follow. The confirmation bias in this case is so strong, that even in the face of being taught, what the data tell you is not so easy for you to see how you were biased by the priors that you had to begin with. I think definitely one of the things that sometimes students talk about later on sometimes, many years after graduation, when they arrive back and they give me examples about their experiences in the business world, that’s a moment that many people will refer to because, I guess, it’s really close to home.

BRIAN KENNY: Yeah. Very interesting. I’m sure any listener out there who is thinking about starting up their own marketplace or platform now has some great insights for what to look at. Felix, thank you so much for joining us today. Really enjoyed it.

FELIX OBERHOLZER-GEE: It was my pleasure to be here. Thank you for the invitation, Brian.

BRIAN KENNY: The book again is called Better Simpler Strategy, a Value-Based Guide to Exceptional Performance . I’m assuming you can find it on all the platforms that you shop on.

FELIX OBERHOLZER-GEE: Yes.

BRIAN KENNY: Thanks again, Felix.

FELIX OBERHOLZER-GEE: Great. Fantastic.

BRIAN KENNY: If you enjoy Cold Call , you should check out our other podcast from Harvard Business School, including After Hours , Skydeck , and Managing the Future of Work . Find them on Apple Podcasts or wherever you listen. Thanks again for joining us. I’m your host, Brian Kenny, and you’ve been listening to Cold Call , an official podcast of Harvard Business School, brought to you by the HBR Presents network.

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Taobao vs. Ebay China

By 2008, Jack Ma, CEO of Alibaba.com Inc., was in a position to consider how to fortify Taobao’s dominant position in China’s online consumer-to-consumer (C2C) market. Ma and his company had come a long way since May 2003, when they first launched the Taobao website. Back then, eBay China dominated the fledgling market, holding over 70 percent share. It had entered China with its acquisition of the start-up EachNet, and was actively building upon that company’s first-mover advantage. By 2006, Taobao overtook eBay China, forcing eBay China to virtually exit the Chinese market. Although eBay would nominally continue to operate in China, it was no longer a concern in Ma’s plans for Taobao, which by 2008 held over 80 percent of the market. How had this upstart company overwhelmed the world’s most formidable player in the online C2C space and how would Ma meet the constant pressure to generate revenue?

ebay in china case study

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Fashion China

Why Ebay failed in China?

ebay in china case study

Ebay entered in the Chinese market in 2002 while acquiring EachNet. When they launched the website in China, the owners expected the company to be successful. The business model seems to be adapted. However in reality they applied the same business model in China that they were using across the world because it was a successful one. In this way, they did not take into consideration the cultural differences and the specificity of the Chinese market.  The business model consisted of charging a small transaction fee for listings and sales made via costumer to customer websites.

First of all, Ebay was used by consumers in order to buy products directly from official shops. People don’t really do C2C business for buying used products, especially because small businesses can suggest cheap products to consumers. Indeed, for both sides, sellers and buyers prefer to deal with fixed prices rather than auction.

A different environment

ebay in china case study

The platform failed to recognize and consider the differences in the Chinese business environment. The manager staff was from Germany and the United States. Consequently, there is a language barrier and insufficient understanding of the local market. Concerning Taobao, which can be considered a competitor they managed to hire Chinese people to handle the business. These people could understand in the best way the Chinese culture. Actually, the name of the platform has a significant meaning which means to dig for treasure. Even though Ebay tried to adopt a Chinese name it was not as catchy as Taobao one.

Marketing tools

In China, the reputation of your brand is very important and can have a significant impact on your business. One of the main issues of Ebay in China stems from the fact that the brand had not the same strength as in the United States. This is why, even if the executive power intended to settle an effective promotion strategy by diffusing many ads on television.

Buyers were a bit reluctant about doing online payments instead of paying upon receipt of products. They should have adapted products and services to local costumers but instead of that they continued to use the website as a global platform format.

Ebay in China

ebay in china case study

Taobao worked with most of the local banks in China in order to carve out a strong secured network for online banking. Nonetheless, on eBay consumers could only pay via PayPal, credit cards, and some debit cards from local banks. Online banking was quite limited. This point discouraged consumers to purchase goods on the website.

In order to better understand why eBay failed in China, we can have a deep look at Tao Bao strategy. Tao Bao worked hard to build a reliable relationship with Chinese costumers in order, to create something called “swift guanxi”. This Chinese concept aims at building a close and pervasive interpersonal relationship. The goal is to favor high-quality social interactions and the exchange of mutual benefits. This principle is very important if one wants to be successful in  China. Understanding the consumers and penetrating their comprehensive environment and life can make a difference.

Everything on Taobao is though for the purpose of making life easier for the customer. There is a section of instant messaging in which customers can exchange with sellers in order to have information about the products they want to buy. The American company failed in this aspect. They did not really consider the fact that Chinese consumers have a real need to have others’ opinions.

Using computer-mediated communication technologies in associated is very essential.

Failure of integration of  the Chinese market

ebay in china case study

One of the major is sues of eBay was that they were too confident about its popularity in the Chinese market. They thought that doing business would be exactly the same. This is the same problem regarding the customers’ behaviors. They did not recognize the differences between the Chinese and American markets.

Actually, competition is very hard in China. Even if, in some cases as a foreign brand you have much more weight than Chinese brands. This is not the case regarding the e-commerce platform. Taobao is very powerful in China and has invested in the advertisement, and promotion but also in tools in order to optimize the website. They made the choice to put money into television. They realized that it was the best way to invest instead of putting money on internet sites. In spite of millions and millions of dollars that eBay spent in order to stay in the competition, their opponents did a better job because they took into consideration the full market.

In addition, eBay creators should have employed Chinese people to integrate their teams. It would have been very useful because these people could have handled better the language and all the features of the Chinese market. Asking for help could have been useful to take benefit from their knowledge and experience regarding the Chinese market .

ebay in china case study

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Hello I would like to contact ebay resellers in China ? Can you help us with that ? I want to sell in China, do you recommand ebay ? It sold handbads, set and clothing

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Hello Mouloud, We can help you to sell, but we think that in China Ebay is not the best match as explained in this article. We can give you solution for Taobao, Tmall, JD or WeChat .. Send us an email with your project.

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ebay in china case study

The failure of eBay on the Chinese Internet

  • March 5, 2014
  • Ebay in China , Internet in China

EBay entered into the China market in 2002 by acquiring EachNet, a leading auction site in China and was successful in capturing a considerable share of the Chinese e-commerce market. However,  even if the company modelled its Chinese site on the lines of its globally successful site,  eBay failed to attract significantly the Chinese consumers . eBay also faced tough competition from local e-commerce companies such as Taobao.

Cultural differences and varying market demands

eBay failed to recognize that the Chinese market and the business environment are very different from the West. eBay sent a German manager to lead the China operation and brought in a chief technology officer from the United States. There was language barrier and insufficient understanding on the local market. Taobao on the other hand was managed by the Chineses and they understood the local culture and needs perfectly. Even the name “Taobao” in Chinese meant to dig for treasure which was an ingenious use of words that caught the attention of the Chinese almost immediately.

Although eBay tried hard by coming up with a Chinese name but it was not as catchy as Taobao and it did not match with the traditional Chinese culture to be fond of treasures.

Ebay cultural difference with market demands

Marketing techniques

It is the aim of consulting firm in China to help foreign brand as eBay to understand their local market. In eBay’s case, a lot of effort have been made, such as advertising on the Internet in a country where small enterprises didn’t use the Internet. Also, eBay did not benefit in China of the same strong brand foundation than in the United States. Taobao on the contrary, made use of media such as popular television shows for its advertising. This straightforward kind of advertising poses to be a success as it appeals to small business owners.

Rather than adapting products and services to local customers, eBay continued with its “global platform” format, which again did not fit local customers’ tastes and preferences. eBay is thus unable to fulfill the 4Ps business model.

Cost free system

eBay in China was charging users to list products and services which will discourage sellers to set up online shops on its website. This will thus cause a decrease in goods and services provided on eBay and buyers will look for alternatives because of the lack of choices. Despite eBay announcing that it will no longer charge a transaction fee on sellers on its Chinese Web site in 2006, it was already too late as Taobao had already made use the period of time (where eBay still collects fees) to garner a loyal base of supporters.

E-commerce market size China

From the diagram above, it is apparent that B2C business models are on the rise in recent years. However, eBay stuck to its C2C business model which even though is still rising in profitability but will jeopardize the ability of eBay to be kept at the competitive edge.

Market share of online transaction volume China

Payment methods 

Taobao cooperated with almost every local bank in China to build up a highly secured network for online banking. However, for eBay, one could only pay via paypal, credit card and some debit cards of local banks. eBay also accepts manual transaction of funds through bank accounts and not much of online banking is accepted if you are using a debit card. This makes payment much of a hassle and discourages consumers from making purchases there. With lack of consumers, there will be no demand and hence there will be a plummet in sellers using eBay in China.

Written by Amy Wang

 “The Real Reason eBay failed in China”

“How eBay failed in China”

 “EBay China decides ‘free’ is a business model”

ebay in china case study

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eBay's Strategy in China: Alliance or Acquisition

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Ebay's strategy in china: alliance or acquisition description.

n December 2006, eBay, Inc, a US company that offers e-commerce, e-payments and internet communication services globally, announced its plan to form a joint venture with China-based online portal and wireless operator, TOM Online, that would give each company 49% and 51% ownership, respectively. This was eBay's third strategic move in China, following its acquisition of a 33% stake in domestic counterpart EachNet in 2002 that marked its entry into the market, and a full acquisition in 2003. Despite the initial good results, eBay had been losing market share to local rival and Alibaba's fully-owned subsidiary-TaoBao. By 2006, eBay had seen its market share drop from a high of 85% to a staggering 29%, while TaoBao's continued to increase, reaching 60%. The joint venture was therefore an attempt by eBay to save its failing Chinese operations. The move also reflected the increasing difficulties foreign internet companies were facing in China because of fierce competition and a changing market environment. eBay believed that it would benefit from TOM Online's local knowledge and political connections. However, some analysts questioned whether political connections alone were the answer and suggested that eBay focus on its product and service offerings instead. How could eBay leverage the joint venture to its success in China? What alternatives did eBay have for enhancing its strategic position in the Chinese market?

Case Description eBay's Strategy in China: Alliance or Acquisition

Strategic managment tools used in case study analysis of ebay's strategy in china: alliance or acquisition, step 1. problem identification in ebay's strategy in china: alliance or acquisition case study, step 2. external environment analysis - pestel / pest / step analysis of ebay's strategy in china: alliance or acquisition case study, step 3. industry specific / porter five forces analysis of ebay's strategy in china: alliance or acquisition case study, step 4. evaluating alternatives / swot analysis of ebay's strategy in china: alliance or acquisition case study, step 5. porter value chain analysis / vrio / vrin analysis ebay's strategy in china: alliance or acquisition case study, step 6. recommendations ebay's strategy in china: alliance or acquisition case study, step 7. basis of recommendations for ebay's strategy in china: alliance or acquisition case study, quality & on time delivery.

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Case Analysis of eBay's Strategy in China: Alliance or Acquisition

eBay's Strategy in China: Alliance or Acquisition is a Harvard Business (HBR) Case Study on Global Business , Texas Business School provides HBR case study assignment help for just $9. Texas Business School(TBS) case study solution is based on HBR Case Study Method framework, TBS expertise & global insights. eBay's Strategy in China: Alliance or Acquisition is designed and drafted in a manner to allow the HBR case study reader to analyze a real-world problem by putting reader into the position of the decision maker. eBay's Strategy in China: Alliance or Acquisition case study will help professionals, MBA, EMBA, and leaders to develop a broad and clear understanding of casecategory challenges. eBay's Strategy in China: Alliance or Acquisition will also provide insight into areas such as – wordlist , strategy, leadership, sales and marketing, and negotiations.

Case Study Solutions Background Work

eBay's Strategy in China: Alliance or Acquisition case study solution is focused on solving the strategic and operational challenges the protagonist of the case is facing. The challenges involve – evaluation of strategic options, key role of Global Business, leadership qualities of the protagonist, and dynamics of the external environment. The challenge in front of the protagonist, of eBay's Strategy in China: Alliance or Acquisition, is to not only build a competitive position of the organization but also to sustain it over a period of time.

Strategic Management Tools Used in Case Study Solution

The eBay's Strategy in China: Alliance or Acquisition case study solution requires the MBA, EMBA, executive, professional to have a deep understanding of various strategic management tools such as SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis.

Texas Business School Approach to Global Business Solutions

In the Texas Business School, eBay's Strategy in China: Alliance or Acquisition case study solution – following strategic tools are used - SWOT Analysis, PESTEL Analysis / PEST Analysis / STEP Analysis, Porter Five Forces Analysis, Go To Market Strategy, BCG Matrix Analysis, Porter Value Chain Analysis, Ansoff Matrix Analysis, VRIO / VRIN and Marketing Mix Analysis. We have additionally used the concept of supply chain management and leadership framework to build a comprehensive case study solution for the case – eBay's Strategy in China: Alliance or Acquisition

Step 1 – Problem Identification of eBay's Strategy in China: Alliance or Acquisition - Harvard Business School Case Study

The first step to solve HBR eBay's Strategy in China: Alliance or Acquisition case study solution is to identify the problem present in the case. The problem statement of the case is provided in the beginning of the case where the protagonist is contemplating various options in the face of numerous challenges that Ebay China is facing right now. Even though the problem statement is essentially – “Global Business” challenge but it has impacted by others factors such as communication in the organization, uncertainty in the external environment, leadership in Ebay China, style of leadership and organization structure, marketing and sales, organizational behavior, strategy, internal politics, stakeholders priorities and more.

Step 2 – External Environment Analysis

Texas Business School approach of case study analysis – Conclusion, Reasons, Evidences - provides a framework to analyze every HBR case study. It requires conducting robust external environmental analysis to decipher evidences for the reasons presented in the eBay's Strategy in China: Alliance or Acquisition. The external environment analysis of eBay's Strategy in China: Alliance or Acquisition will ensure that we are keeping a tab on the macro-environment factors that are directly and indirectly impacting the business of the firm.

What is PESTEL Analysis? Briefly Explained

PESTEL stands for political, economic, social, technological, environmental and legal factors that impact the external environment of firm in eBay's Strategy in China: Alliance or Acquisition case study. PESTEL analysis of " eBay's Strategy in China: Alliance or Acquisition" can help us understand why the organization is performing badly, what are the factors in the external environment that are impacting the performance of the organization, and how the organization can either manage or mitigate the impact of these external factors.

How to do PESTEL / PEST / STEP Analysis? What are the components of PESTEL Analysis?

As mentioned above PESTEL Analysis has six elements – political, economic, social, technological, environmental, and legal. All the six elements are explained in context with eBay's Strategy in China: Alliance or Acquisition macro-environment and how it impacts the businesses of the firm.

How to do PESTEL Analysis for eBay's Strategy in China: Alliance or Acquisition

To do comprehensive PESTEL analysis of case study – eBay's Strategy in China: Alliance or Acquisition , we have researched numerous components under the six factors of PESTEL analysis.

Political Factors that Impact eBay's Strategy in China: Alliance or Acquisition

Political factors impact seven key decision making areas – economic environment, socio-cultural environment, rate of innovation & investment in research & development, environmental laws, legal requirements, and acceptance of new technologies.

Government policies have significant impact on the business environment of any country. The firm in “ eBay's Strategy in China: Alliance or Acquisition ” needs to navigate these policy decisions to create either an edge for itself or reduce the negative impact of the policy as far as possible.

Data safety laws – The countries in which Ebay China is operating, firms are required to store customer data within the premises of the country. Ebay China needs to restructure its IT policies to accommodate these changes. In the EU countries, firms are required to make special provision for privacy issues and other laws.

Competition Regulations – Numerous countries have strong competition laws both regarding the monopoly conditions and day to day fair business practices. eBay's Strategy in China: Alliance or Acquisition has numerous instances where the competition regulations aspects can be scrutinized.

Import restrictions on products – Before entering the new market, Ebay China in case study eBay's Strategy in China: Alliance or Acquisition" should look into the import restrictions that may be present in the prospective market.

Export restrictions on products – Apart from direct product export restrictions in field of technology and agriculture, a number of countries also have capital controls. Ebay China in case study “ eBay's Strategy in China: Alliance or Acquisition ” should look into these export restrictions policies.

Foreign Direct Investment Policies – Government policies favors local companies over international policies, Ebay China in case study “ eBay's Strategy in China: Alliance or Acquisition ” should understand in minute details regarding the Foreign Direct Investment policies of the prospective market.

Corporate Taxes – The rate of taxes is often used by governments to lure foreign direct investments or increase domestic investment in a certain sector. Corporate taxation can be divided into two categories – taxes on profits and taxes on operations. Taxes on profits number is important for companies that already have a sustainable business model, while taxes on operations is far more significant for companies that are looking to set up new plants or operations.

Tariffs – Chekout how much tariffs the firm needs to pay in the “ eBay's Strategy in China: Alliance or Acquisition ” case study. The level of tariffs will determine the viability of the business model that the firm is contemplating. If the tariffs are high then it will be extremely difficult to compete with the local competitors. But if the tariffs are between 5-10% then Ebay China can compete against other competitors.

Research and Development Subsidies and Policies – Governments often provide tax breaks and other incentives for companies to innovate in various sectors of priority. Managers at eBay's Strategy in China: Alliance or Acquisition case study have to assess whether their business can benefit from such government assistance and subsidies.

Consumer protection – Different countries have different consumer protection laws. Managers need to clarify not only the consumer protection laws in advance but also legal implications if the firm fails to meet any of them.

Political System and Its Implications – Different political systems have different approach to free market and entrepreneurship. Managers need to assess these factors even before entering the market.

Freedom of Press is critical for fair trade and transparency. Countries where freedom of press is not prevalent there are high chances of both political and commercial corruption.

Corruption level – Ebay China needs to assess the level of corruptions both at the official level and at the market level, even before entering a new market. To tackle the menace of corruption – a firm should have a clear SOP that provides managers at each level what to do when they encounter instances of either systematic corruption or bureaucrats looking to take bribes from the firm.

Independence of judiciary – It is critical for fair business practices. If a country doesn’t have independent judiciary then there is no point entry into such a country for business.

Government attitude towards trade unions – Different political systems and government have different attitude towards trade unions and collective bargaining. The firm needs to assess – its comfort dealing with the unions and regulations regarding unions in a given market or industry. If both are on the same page then it makes sense to enter, otherwise it doesn’t.

Economic Factors that Impact eBay's Strategy in China: Alliance or Acquisition

Social factors that impact ebay's strategy in china: alliance or acquisition, technological factors that impact ebay's strategy in china: alliance or acquisition, environmental factors that impact ebay's strategy in china: alliance or acquisition, legal factors that impact ebay's strategy in china: alliance or acquisition, step 3 – industry specific analysis, what is porter five forces analysis, step 4 – swot analysis / internal environment analysis, step 5 – porter value chain / vrio / vrin analysis, step 6 – evaluating alternatives & recommendations, step 7 – basis for recommendations, references :: ebay's strategy in china: alliance or acquisition case study solution.

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E-bay case study

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Good job of localizing its websites, with local languages and currencies and providing locationspecific information. Ebay was beginning to start the expansion strategy both locally and globally by acquiring different companies.

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ebay in china case study

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This paper considers the motivations for businesses to expand to other countries using the entry of eBay into China as a case study. It observed that eBay adopted the wrong entry mode by acquiring 100 percent of EachNet. The company would have performed better if it had adopted the joint venture approach with minority stake as it later did with Tom Online or if it had only retained minority stake, as was the case when it acquired 33 percent of EachNet. It was discovered that the various entry modes have their pros and cons depending on the peculiarity of the host market. This paper therefore, recommends that in entering a new market, companies should ensure to have a proper understanding of the local business dynamics before settling for any entry strategy.

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The eBay’s Strategy in China, Case Study Example

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eBay’s strategic decision to enter the Chinese market warrants extreme caution. Indeed, although the online commerce firm built a very successful business model facilitating online transactions in the US and other developed markets, it failed to understand potential differences in how consumers purchased goods in the Chinese market. The failure to understand this difference not only compromised eBay’s ability to succeed in China, but also illustrated a fundamental lack of understanding in managing operations abroad.

The Chinese online consumer market has attracted numerous competitors in the online commerce space. According to the China Internet Network Information Network, China has a total of 87 million Internet users, roughly 32.8 million individuals have shopped online. That number was projected to triple by the year 2005. Two main companies have emerged as the main competitors in this space with substantially different business models: Eachnet (eBay) and Taobao.

eBay acquired Eachnet in 2003; the firm boosted $124 million in transactions in 2003, a figure that is projected to increase in $241 million in 2005. Leveraging the purchase of Eachnet, Ebay decided to use its existing business model in China. The main feature of Ebay’s business model (also used by Eachnet before the acquisition) is: a transaction fee placed on users to list products, and a percentage cut of all final sales (a commission of the final sale). This business model was originally developed in a number of developed markets including the United States and the United Kingdom. eBay, by deciding to use a business model developed in developed markets for developed consumers, posited that consumers in a developing market (i.e., China) would prefer a similar commerce platform for transactions. This was in sharp contrast to the business model of locally established Taobao.

Taobao is the online commerce arm of local internet giant Alibaba.com. Alibaba was established as the first business-to-business e-commerce site in 1999. As part of the site’s expansion, it decided to enter the consumer to consumer online space in 2003 through the online company Taobao. Taobao has a different business model than Eachnet: Taobao does not charge a fee to post transactions, nor does it charge a commission fee for completed sales. Rather, Taobao has innovated at the margins in the online marketplace: The firm hopes to increase volume of sales on the site that will eventually lead to a fee-based model. Indeed, Alibaba seemingly conceptualizes Taobao as a mechanism to grow the still nascent online market in China, hoping to charge fees once a critical mass has been achieved.

There were myriad assumptions in eBay’s strategic calculus that may have gone astray in China. First, eBay posited that a “middle man” model between consumers would be welcome in China. Whether this assumption is true or not is still up for debate; however, there is evidence (as referred to in the article) that Chinese may prefer a more personal means of transaction. Indeed, although eBay posited that consumers may be attracted to the convenience of online payment tools such as PayPal, in fact, consumers may prefer meeting in person to exchange cash and goods. Second, eBay also bet that a model based on fees and commissions would grow the market and condition consumers to pay for the service. Although the jury may be still out on this point, eBay’s calculation was based more on its experience in developed consumer markets than in emerging consumer markets. That is, the online consumer to consumer market in developed countries could be an extension of an existing robust consumer market where demand for the service already exists. This assumption, however, may not be the correct one in an emerging country with a growing middle class and consumer base. Indeed, consumers in a country such as China are still developing preferences and mediums to conduct transactions; by essentially “importing” the fee-based structure the company may fail to develop a large enough market to ultimately be successful.

Overall, eBay’s failure was more strategic in nature than operational. EBay made a bet that consumers and their behavior was (somewhat) alike to their existing business model used in developed countries. This may not have been the right analogical conclusion: China, as an emerging country with a burgeoning middle class without a defined consumption history, may not have been ready for the model. EBay should have done extensive market research to understand in what ways the business model was appropriate for the market, and in what potential ways the business model was not appropriate for the market.

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Case Study Ebay in China

Accent, followed by a full calculation a year later in 2003.

Critically assess Ebay .S choice of market entry strategy for China, lasting both the advantages and disadvantages of Its acquisition strategy. As we know, eBay’s China expansion strategy can be considered as failure, despite the fact that eBay entered this potentially rewarding market with caution.

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This cautious strategy was very unusual for eBay, because they used full-forced, head- on. Be-flirts-or-nothing.

Tragedy in other markets, for various reasons, it would be impossible to implement this strategy when penetrating Chinese market. So acquiring an already comparatively recognizable and well established brand seemed to be the best way to continue eBay’s expansion in Asia. Without a doubt, Each Net was the best candidate for acquisition at the time.

When eBay acquired 33% shares of Each Net In 2002, It seemed to be hugely successful, because in year 2003 the value of Each Net had doubled and market share had rocketed to 85% – this Minimal success encouraged full acquisition of Each Net. As we know, the success did not turn out to be long-lasting, despite the fact that in first few years the performance of the company was brilliant While acquisition of Each Net meant many advantages for eBay, it also implied serious disadvantages.

Advantages of Each Net acquisition:

Each net had strong financial backing from large venture capital companies Immense market potential – 1,23 billion Chinese language speakers all around the world Rapidly increasing number of internet users In China – increasing number of potential customers Each Net In essence was an Imitation of eBay, adjusted to it Chinese customer needs, but with much greater recognition In China Increasing popularity of shopping online In China. Well established image of Each Net in China High Each Net market share in year 2002 Wide range of different items sold through Each Net Only significant player in online auction market in China by year 2002 was Each Net Disadvantages of Each Net acquisition: Cultural differences and buying habits of Chinese.

Ebay in China Case Study

Huge Investments required unpredictability of the fast-changing Chinese market – huge risks Emerging monitors – Taboo, which documented eBay Each Net In future, by better adjusting to Chinese customer needs and buying habits Alabama had more established presence in China and much better knowledge of Chinese customers – reason Tort Increasing lack AT consumer trust In eBay Each n Net In Torture Each Net failed to create customer trust in future, while Taboo succeeded Chinese refusal of adopting traditional eBay practices of interaction possibilities between buyer and seller, provided by eBay Each Net – important for Chinese, Taboo was much better in this aspect Comparatively poor customer service In conclusion, this acquisition, which was probably the right step by eBay, turned out to be failure, despite the fact, that at first it seemed to be a huge success.

In my opinion it is because eBay’s management was so overwhelmed with the initial success, that they lost caution – they were very conscious at beginning but failed to adjust to customer needs, they did not pay enough attention to them, which led to eBay Each Net to situation where they were documented by Taboo in Chinese market.

Question 1. Assess the potential benefits and risks of eBay’s Joint venture with Tom Online

In an eBay’s and TOM Online formed Joint venture there are some benefits as well as some risks. One of the benefits is that TOM Online is a Chinese domestic brand, which is much better for consumers of China. They mostly like well known Chinese internet brands.

TOM Online is a market leader in China in sphere of mobile value- added services and has an internet portal, which is one of the biggest and most popular in china, it means that TOM Online is a well know brand in China and is vapidly recognized in the internet. TOM Online has a good experience in cooperation with Keep and has given great results in it. This shows that TOM Online knows how to present new product in the market and how to increase its market share, which is essential for eBay at the moment.

All the aspects of TOM Online show that this company has a great and efficient knowledge of Chinese market and exactly this feature is very necessary for eBay to gain good results. In addition, political connections of the TOM Online can be very helpful in Chinese market, especially in nowadays and situation in China.

Risks of this Joint venture are not as great as benefits, but there is a risk to loose a chance to strengthen the eBay brand, because Chinese customers will be focused on the TOM Online and Accent.

There also is a risk of loosing big amounts of money, because TOM Online has a 2% bigger ownership, but in amount of money, eBay invests two times more money, however the success of the TOM Accent depends more on TOM Online. There also can be assessed as a risk point, that TOM Online is focused on mobile value-added services and their target audience is generally young consumers, but eBay target audience is a little older.

Question 2. Bay wall nave a stake In ten new Jolt venture Wendell loom online will nave ownership

Critically assess both companies’ decisions on their respective percentage of stake In our opinion E-Bays decision to Joint venture with TOM Online was a great success.

Although E-Bay is a giant and successful company in US and has successfully expanded worldwide, China is a “Hard-Nut” for them. China’s cultural differences and moral values lead them to face some difficulties in setting up eBay business. Chinese people still trust their own companies more and respect them. TOM Online is a successful company with a good reputation and has already aimed trust of millions of customers.

Their activity area is also not far from eBay’s – mainly internet and other IT services, and mobile entertainment. TOM Online was also expanding rapidly and cooperating with various influential companies as for example Keep.

But lately they also had a decrease in revenues so Joint venture also was an opportunity for them. That way they widened their service range and that meant new opportunities. Why eBay 49% ownership and 51% to TOM Online? Why then eBay still invests more? And why the term ‘eBay’ disappears from the name of this Joint venture – “TOM Accent”. We think that that is quite obvious.

There are several factors which explain this situation.

As we already know the Chinese culture is very different and trust and respect are very substantial terms. So by erasing the US brand name from the Joint venture name people would trust it more. Moreover both TOM and Each net are known as local brands. In this Joint venture TOM invests IIS$20 million and contributes its local knowledge, technology and brand value, which are much more valuable than money – this explains why eBay invests twice as more. Moreover TOM Online has very important persons among their shareholders.

This Joint venture old open a whole new market segment for both – eBay and also TOM Online, allowing them to fulfill and widen significantly together.

They can also let eBay into “mobile world”. As we all know – China has been always very different and that is the reason why setting up a stable, successful company has been a “hard battle” for others. But it is also a huge amount of customers which then means a great revenue if succeed. EBay Accent understood than they are too unstable and the stakes are too high, so the Joint venture with TOM Online and creating TOM Accent was the best opportunity.

Question 3. Strategic recommendation on International Commercial Strategy for E-Bay

Increase revenues by capturing more customers Increase of the customer base will positively contribute to increase in revenues, customer loyalty schemes may be developed further in order to ensure that more people fall into the category of loyal customers, the services could be improved in order to serve some customized customer needs, a wider advertising campaign may De Carlen out In order to appeal to a were market segment, perhaps even trying to work with some niches of the market providing solutions to their problems, satisfying their needs and wants.

Look into new pay system or create own. Increasing the number of ways how customers can pay for their purchases will ensure that revenues grow and that a wider appeal will be given to the company – the services will be interesting both to credit card owners, pay pal users thus ensuring that customers can choose the method in which they would like to pay for their purchase – this method will also contribute to the solution of security concerns since people will be able to choose the method they consider to be the safest one.

The Company should look at acquiring shopping comparison sites and vertical search engines to drive traffic and acquire consumers. Ebay should also consider how they can compete with Namespace, faceable and youth, because a lot of selling is made through these sites, like Google towards is giving great traffic to Ebay, it is also a rival to Ebay, it proposes other similar sites.

Company could also enlarge to the mobile sphere. Make eBay available for on mobile phones and Pad’s and others. As that is one of TOM Online activity sphere, it could be easily done and there is already an available previously formed customer group, who could be also very interested in this kind of service.

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Data from China suggest no survival benefit of two antiviral drugs in elderly COVID patients

Older patient in dark hospital room

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"Finally, the cause of selection bias cannot be ruled out because patients with more severe clinical presentations may have been preferentially selected by clinicians to receive nirmatrelvir/ritonavir," they wrote. "In that case, patients who received nirmatrelvir/ritonavir would be expected to have worse outcomes, which could obscure a potential therapeutic benefit of nirmatrelvir/ritonavir."

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SARS-CoV-2 virus

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A large study in Spain finds that COVID-19 is associated with a 30% increased risk of major cardiovascular events in people with HIV during the year following infection. The study is published in Clinical Microbiology and Infection .

Using a population of people in Catalonia with HIV (PWH) who had a documented COVID-19 infection, plus PWH with no COVID infections, the authors of the study estimated the incidence rate (IR) of a first cardiovascular event (CVE) after COVID-19 during an average follow-up period of 243 days.

Included were 4,199 PWH with and 14,004 PWH without COVID-19 infections, 82% of all study subjects were men, and the average age was 47. Overall, 211 PWH with COVID-19 and 621 without developed CVE, the authors said, with an IR of 70.2 and 56.8 per 1,000 person-years, respectively.

Even mild infections pose risk

COVID-19 was associated with a 30% increased subsequent risk of CVE (adjusted hazard ratio, 1.30; 95% confidence interval, 1.09 to 1.55). Risk was highest in the 6 months following acute infection, and there was no association with COVID-19 severity and subsequent CVE, suggesting that even mild to moderate infections increased the risk.

"Even while the absolute rates of CVE in PWH have significantly declined in recent years, they continue to have a 1.5-2-fold greater relative risk compared to individuals without HIV," the authors wrote. "Therefore, the confirmation that the incidence of major CVE is increased the year following COVID-19 in PWH, including those non-hospitalized or without prior CVE, deserves major awareness."

The authors said reasons for the increased risk are unknown and multifactorial. Earlier studies have suggested PWH have elevated levels of T-cell and inflammatory markers after COVID-19.

Cambodia reports fourth H5N1 avian flu case of the year

Cambodia has reported its fourth human H5N1 avian flu case of the year, the brother of a 9-year-old boy who recently died from his H5N1 infection, according to a statement from the country's health ministry that was translated and posted by Avian Flu Diary , an infectious disease news blog.

H5N1 virus particles

The latest confirmed case is a 16-year-old boy who didn't have respiratory symptoms. The boy and his deceased younger brother are from Kratie province in northeastern Cambodia. The health ministry didn't say if the teen had any other symptoms, but it said it continues to track contacts and has distributed oseltamivir to close contacts of confirmed cases.

Earlier report noted poultry deaths

The current statement didn't have any details about the teen's exposure. The ministry statement last week announcing his brother's illness and death said poultry had died at the patient's home and that dead birds were eaten.

Cambodia has now reported 10 human H5N1 cases since 2023, part of rise in cases that follows a decade-long lapse in cases. The country's recent cases have involved an older H5N1 clade (2.3.2.1c) that is known to circulate in the country's poultry. It is different than the newer H5N1 clade (2.3.4.4b) that is circulating widely in wild birds and poultry in multiple world regions, with sporadic detections in mammals and humans.

Quick takes: Listeria recalls expand, CDC mpox vaccine reminder, Oregon plague case

  • Several US food companies have issued recalls because they contain cheese and dairy ingredients made by a California company at the center of an investigation into a multistate Listeria monocytogenes outbreak . In an outbreak update , the Centers for Disease Control and Prevention lists 61 foods on a recall list, which include the earlier recalled products from Rizo-Lopez Foods, plus several other products from other companies that used Rizo-Lopez Food ingredients. The list of foods containing potentially tainted ingredients includes items such as meal kits, salad kits, layered tips, and salad dressings. The number of outbreak illnesses remains at 26 cases, 2 of them fatal, from 11 states.
  • Though mpox cases in the United States have declined sharply since the outbreak peak in the summer of 2022, small clusters of cases continue to be reported, prompting a vaccination reminder today from the Centers for Disease Control and Prevention (CDC). In October 2023, the CDC recommended that people in risk groups ages 18 and older receive two doses of the Jynneos vaccine to reduce the risk of continued transmission. However, in a Clinician Outreach and Communication Activity (COCA) e-mail notice today, the CDC said only one in four of the approximately 2 million eligible people have received two doses. It urged clinicians to remain diligent about taking patients' sexual histories and recommending Jynneos to those who are eligible. A recent surveillance update said 169 mpox cases have been reported in US so far this year.
  • In Oregon, public health officials in Deschutes County have reported a human plague infection in a person who likely contracted the disease from his or her symptomatic pet cat. The case marks Oregon's first human plague case since 2015, according to a statement . The patient's illness was identified early in the disease, posing a low risk to the community. A report from NBC News quoting a county health official said the patient was hospitalized with a draining abscess that progressed to the bloodstream but has responded well to antibiotic treatment. Investigators have found no other cases. The disease can spread to people or animals through a bite from an infected flea or contact with an animal infected with Yersinia pestis . In central Oregon, the animals most likely to carry plague are squirrels and chipmunks, but mice and other rodents can all carry the bacteria.

In case you missed it

This week's top reads, covid-19 behind thousands of excess us deaths, analysis shows.

A total of 162,886 of these excess natural-cause deaths (90% PI, 14,276 to 308,480) were not reported as COVID-19.

excess deaths

US respiratory virus activity remains high, with flu B rising in 2 regions

Influenza B activity is fueling rises in the Midwest and Central regions.

sick schoolkid fever

Those hospitalized with COVID-19 later at risk for several key symptoms

Adults and kids have, respectively, a 50% and 40% higher risk of having shortness of breath after recovery from COVID-19.

exhausted woman

Alaska reports fatal Alaskapox case

The case is the first outside of the Fairbanks area, suggesting wider circulation in small animals.

cat scratch

FDA removal of decongestants made with ineffective drug would disrupt drug supply chain, experts say

In the event of administrative removal of these products, clinicians and consumers could substitute oral pseudoephedrine or intranasal decongestants such as phenylephrine or oxymetazoline, the authors say.

Studies spotlight cognitive issues, depression, fatigue in those with long COVID

57% of those with post–COVID-19 condition—or long COVID—said they experienced symptoms of a cognitive (thinking) deficit daily.

long covid

So far, the cases have been detected in 3 South African provinces and aren't fueling a resurgence in cases.

Long COVID incidence in US varies by state, highest in West Virginia

Nationally, 6.4% of US adults reported ever having experienced long COVID

Municipal water linked to Minnesota city's Legionnaire's disease outbreak

Chlorination wasn't required for the city's water system, and city officials are developing a disinfection plan and considering their next steps.

Research shows 1 in 10 infected pregnant women develop long COVID

Long COVID was not associated with any one trimester of pregnancy.

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  1. ebay in china case study

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  2. Taobao vs. Ebay China Case Solution And Analysis, HBR Case Study

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  3. A cross-cultural analysis about the failure of eBay in Chinese market

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  4. ebay in china case study

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  5. A cross-cultural analysis about the failure of eBay in Chinese market

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  6. Why Is EBay Returning to China?

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COMMENTS

  1. A Case Study on International Expansion: How eBay Failed in China

    A Case Study on International Expansion: eBay eBay was founded in September 1995 by Pierre Omidyar to create an open marketplace for everyone in the world to trade with one another. Three...

  2. How EBay Failed In China

    In 2004, eBay had just entered China and was planning to dominate the China market. Alibaba was a local Chinese company that helped small- and medium-sized enterprises conducting business...

  3. Strategies for Underdogs: How Alibaba's Taobao Beat eBay in China

    Harvard Business School professor Felix Oberholzer-Gee discusses his case, " Alibaba's Taobao ," and related strategy lessons from his new book, Better, Simpler Strategy: A Value-Based Guide ...

  4. Taobao vs. Ebay China

    Taobao vs. Ebay China By William Barnett, Mi Feng, Xiaoqu Luo 2010 | Case No. IB88 | Length 17 pgs. Organizational Behavior By 2008, Jack Ma, CEO of Alibaba.com Inc., was in a position to consider how to fortify Taobao's dominant position in China's online consumer-to-consumer (C2C) market.

  5. Why Ebay failed in China?

    Olivier VEROT July 13, 2018 Ebay entered in the Chinese market in 2002 while acquiring EachNet. When they launched the website in China, the owners expected the company to be successful. The business model seems to be adapted.

  6. Why eBay Failed in China

    Why eBay Failed in China Successful in dozens of countries, the multi-billion dollar business was no match for China, where citizens place a premium on interpersonal relationships and high-quality social interactions. What lessons can others learn? Rosella Eleanor LaFevre Updated: Jun 14, 2017 Original: Jun 14, 2013

  7. Internationalization: Choosing The Right Entry Mode: Lessons From Ebay

    Abstract and Figures. This paper considers the motivations for businesses to expand to other countries using the entry of eBay into China as a case study. It observed that eBay adopted the wrong ...

  8. Alibaba vs. Ebay: Competing in the Chinese C2C market (C)

    The A-case begins in April 2003 as Jack Ma, the 39-year-old CEO of Alibaba, worries. According to the latest market data, eBay, the global leader in online auctions had reached almost total dominance of the local consumer-to-consumer (C2C) market - only about a year after its entry into China. While Alibaba was not active in the Chinese C2C ...

  9. Why eBay Lost to TaoBao in China: The Glocal Advantage

    Abstract. TaoBao has emerged as the leading consumer-to-consumer (C2C) electronic commerce platform in China. It has replaced eBay, as the leading e-commerce platform in the country. The dominance ...

  10. EBAY'S STRATEGY IN CHINA: ALLIANCE OR ACQUISITION

    Using the fast-expanding market model as an initial analytical framework and multiple case approach, we fi nd that Chinese online shopping corresponds to the takeoff stage of a successful cluster, in which signifi cant opportunities are still present in Chinese Tier 3 and Tier 4 cities.

  11. eBay in China: Strategies and Challenges

    Publication Year : 2007 Authors: Gayathri R, Doris Rajakumari John Industry: Internet and e-commerce Region: China Case Code: CCA0049C Teaching Note: Not Available Structured Assignment: Not Available OR Abstract: eBay a world leader in the online auction industry entered China in 2002.

  12. eBay's Problems in China|Business Strategy|Case Study|Case Studies

    This case is about the challenges faced by eBay Inc. (eBay), a leading e-commerce company, in the Chinese online trading market. eBay entered China in 2002 by acquiring EachNet, a leading auction site in China and was successful in capturing a considerable share of the Chinese e-commerce market.

  13. PDF How and why Ebay failed and Alibaba/TAOBAO had success in the ...

    The growth of E-Commerce in China was potentiated through the increased number of internet users. The China Internet Network Center reported that the number of internet users in China reached 123 million by the end of June 2006 (Lu Ying, 2007). China was the second largest country in the world which has the highest population of internet users. The

  14. eBay in China| Strategy Case Study

    For 2005, eBay has earmarked a sum of $100 million for investments in China. However, eBay is facing tough competition from a Chinese local e-commerce site, taobao.com, which started its operations in 2003 and within a span of two years, has overtaken eBay in terms of transaction volume.

  15. The failure of eBay on the Chinese Internet

    March 5, 2014. Ebay in China, Internet in China. EBay entered into the China market in 2002 by acquiring EachNet, a leading auction site in China and was successful in capturing a considerable share of the Chinese e-commerce market. However, even if the company modelled its Chinese site on the lines of its globally successful site, eBay failed ...

  16. eBay's Strategy in China: Alliance or Acquisition Case Study Solution

    Import restrictions on products - Before entering the new market, Ebay China in case study eBay's Strategy in China: Alliance or Acquisition" should look into the import restrictions that may be present in the prospective market. Export restrictions on products - Apart from direct product export restrictions in field of technology and ...

  17. A Case Study on International Expansion: Discussion

    A year after eBay entered China, Amazon went up against Taobao's parent company, Alibaba; this was the second case study. And the third case study was on Groupon's cultural mistake.

  18. (DOC) E-bay case study

    2016 • Onyeka Uche Ofili This paper considers the motivations for businesses to expand to other countries using the entry of eBay into China as a case study. It observed that eBay adopted the wrong entry mode by acquiring 100 percent of EachNet.

  19. A Case Study on International Expansion: How eBay Failed in China

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  21. Case 4 Best Buy and e Bay in China

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  22. Case Study Ebay in China

    Case Study Ebay in China Accent, followed by a full calculation a year later in 2003. Critically assess Ebay .S choice of market entry strategy for China, lasting both the advantages and disadvantages of Its acquisition strategy.

  23. Ebay in China

    21/11/2011 E-Bay Strategy In China Alliance or Acquisition? Case Study Strategic Management Gabriela Šalamonová Barbora Jandová Pierrick Boissel Julien Meunier Alexandre Godet fSUMMARY I. The Input Stage CAGE VRIO Analysis CPM matrix EFE matrix IFE matrix II. The Matching Stage BCG matrix SPACE matrix GSM matrix III.

  24. Influencing factors and mechanisms on consumers' behavior: A case of

    This study not only broadens the applications boundary of the theory of planned behavior, but it also provides a new perspective for research on the behavioral awareness of tea tourism consumers. The findings have implications for predicting and promoting future tea tourism in China and beyond.

  25. Water

    The potential environmental impact and increased operational costs associated with the upgrading and renovation of sewage treatment plants are acknowledged. This study employs the upgrading and expansion project of a municipal sewage plant in Dongguan City, Guangdong Province, as a case study. Utilizing the principles and methods of the Life Cycle Assessment (LCA), a comprehensive assessment ...

  26. Data from China suggest no survival benefit of two antiviral ...

    A large-scale, population-based study in China reports that chronic obstructive pulmonary disease (COPD) patients were nearly eight times more likely to use antibiotics than the general population and received nearly twice as many antibiotic prescriptions, researchers reported late last week in the Journal of Antimicrobial Chemotherapy.. Using prescription data and survey responses from ...

  27. The Strange Case of Dr. Mabuse: A Study of the 12 Films and Five ...

    The Mabuse phenomenon is recognized as an icon of horror in Germany as Frankenstein and Dracula are in the United States. This work is a study of the 12 motion pictures and five books (and some secondary films) that make up the eight decades of adventures of master criminal Mabuse, created by author Norbert Jacques in the best-selling 1922 German novel and brought to the screen by master ...

  28. Propagating the Rosary in the Early Qing—A Case Study of del ...

    Studies on the Rosary in the late Ming and early Qing usually focus on works written by Jesuits and mostly stem from an artistic aspect. This article, however, shifts the focus to The True Peace of Humankind, a manuscript written by the Dominican missionary Arcadio del Rosario in the seventeenth century, the first comprehensive book on the Rosary in Chinese. It first summarizes the early-stage ...