Re Expansion Of Ebay Into China

Read the case carefully and answer the following questions: 1.Till 2005, eBay EachNet was the leader in the Chinese e-commerce market, controlling more than half of it. But eBay EachNet soon lost its market leadership position to Taobao.com (Taobao). In this context, analyze the reasons that can be attributed to Taobao’s edge over eBay. 2.a. To enable people to trade with each other, Pierre Omidyar created a marketplace in September 1995 which was later called eBay. By mid 1997, eBay received one million page hits per

eBay Inc (eBay) is an e-commerce corporation founded in 1995 and headquartered in California. eBay is one of the largest online marketplace with over 149 million active buyers globally (eBay Inc 2015). According to Nielsen (2014), on The Australian Online Landscape Review, eBay was in the top 10 online brands with approximately 7 million unique audiences.

E-Bay was founded in 1995, it was as radical and cutting-edge as many of the other "dot com" startups launched in that era. Today, however, eBay is one of the world’s most venerable online companies, not to mention one of the most endlessly emulated and discussed companies in the world (Hsiao, 2016). In an Article written by Aron Hsiao, Hsiao states, “eBay is place to buy meaning, you can get nearly anything you need or want at prices better than you can find in traditional brick-and-mortar or even online stores. Though there are lots of rotten deals on eBay, too, the careful consumer can always come out ahead. He then says, “eBay is a place to sell meaning, whether you are a Bix-box retailer or just an average Joe (or Jane) cleaning out your garage, nearly anything you list on eBay will sell if you are flexible enough about the price. E-Bays global reach can even move unusual items that are not in demand in your

Prior to reading the Harvard Business Review on Doing Business in China, I assumed that business was a universal thing around the world. I assumed that business was the same in all countries. I assumed that every country had the same end goals when it came to business. As a result, I assumed that all countries followed a similar template for how business negotiations work. I was under the assumption that business was all about numbers and money; I didn’t expect to see so much energy focused on creating relationships. I originally assumed China was a very strict and numbers based country when it came to business. In my mind, China was this giant country where everything is made and manufactured at a lower price. As a result, I assumed that

Amazon.com was founded by Jeffrey Bezos in 1994. The company began as an online bookstore. Mr. Bezos saw the potential of the Internet as a selling platform. In the beginning, the main focus was on selling books. The reason was that there was little to no competition for selling books online. The company eventually moved to music and video, but that market had a few key distributers that could possibly compete. Amazon.com emerged at the perfect time. The late 1990’s gave the company plenty of time to create name recognition. The company’s initial public (IPO) was a huge success. Mr. Bezos’s goal was to raise 50 million dollars in capital, but made 54 million instead. This allowed the company to expand into 160 different markets across the globe.

It suggests that being on the strong financial position can be the key factor of success. eBay’s financial performance resulted a 2 percentage increase from the prior year. The executive team has been built in order to provide more well-organised ways of operating. It helps to reduce the cumulative costs. As a result, eBay generated strong operating cash flow and ended with cash equivalents and non-equity investments (eBay annual report, 2009).

EBay’s business strategy originally used a two-sided platform, founder, Pierre Omidyar (1995), developed the firm out of, what he saw as a, ‘need’ or ‘niche’ in the market that needed accommodating. This niche was to develop lower search costs and find a way to determine a fair price in the industry. (I.e. a working price mechanism) Due to high search costs the ‘used goods and collectables’ market had suffered a stifled growth. Whereas the lack of a price mechanism in the market meant products were sold primarily through bilateral negotiation, through buyer and seller. This was an issue as it didn’t reveal the true prices in the market as little or no competition prevented competitive pricing strategies from emerging. However, the emergence of eBay’s auctions feature transformed Bi-Lateral trades into Multi-Lateral trades, facilitating efficient price discoveries. (R.Salehnejad, 2012, Note 3) In 2003 eBay introduced fixed prices using the ‘buy it now’ function in which eBay still benefited from a listing and commission fee. This effectively ensured that the merchant always got the price they wanted for a good, not necessarily the market price it deserved. Furthermore, in 2001 eBay introduced ‘eBay Stores’ allowing firms to offer its products at fixed prices through the eBay site, such as the Home Depot in the USA. Here it is clear that eBay was moving into Amazon’s territory as an online retailer and merchant platform. Although eBay

On Labor Day, Monday, September 4, 1995, Pierre Omidyar, a 28 years-old software developer, who previously worked for Claris, develops software for Apple computers started eBay from his home. Omidyar first called his website Auction Web because he was told that was his first choice for a website name with the concept of auctioning. The first item he placed to auction was a broken laser pointer. He received a bid and sold for $14.83. Omidyar was very shocked when the item sold and realized that he had created something extraordinary. The website began to grow and gain great familiarity. Omidyar tried to register the site under the domain echobay.com. It was already in usage, so Omidyar decided to shorten the name to eBay.com which originated from Echo Bay Technology. The website is now ready for business and later became a leader in Internet revenue. Items on eBay are listed by categories and anyone with an eBay account can bid on the items. You can find anything on eBay, including cars, real estate, collectibles, concert tickets, CDs, clothing, DVDs, artwork and etc. When items are listed for auction on eBay it can be seen by millions of people all over the world.

Meg Whitman served as President and Chief Executive Officer of eBay, from 1998 to 2008. During her stay of 10 years with the company, she oversaw its expansion from 30 employees and $4 million in annual revenue, to more than 15,000 employees

The market eBay takes place in is primarily the Internet market. Around 1995 the Internet market was just beginning. “there will be more than 500 million users by 2003 and a rapid increase in e- commerce turnover, rising from US$500 billion worldwide in 2001 to more than US$3 trillion in 2004” (Fichter, 2003) EBay was a pioneer in Internet market until competitors such as Amazon and Wal-Mart began to sell products online as well. “Online marketing is now the fastest-growing form of marketing” (Armstrong, 2013). The difference between eBay and its

The company eBay Inc. is an American multinational Internet consumer-to-consumer corporation. Founded in 1995 by Pierre Omidyar in San Jose, California, it is now a multi-billion dollar business with operations localized in over thirty countries including China and India. It’s main enterprise is eBay.com, an online auction and shopping website that allows people and businesses to buy and sell a broad variety of goods and services internationally. Millions of collectibles, décor, appliances, computers, furnishings, equipment, domain names, vehicles, services, intangibles and other miscellaneous items are listed, bought, or sold daily on eBay. Anything can be auctioned on the site as long as it is not illegal and does not violate the eBay’s Prohibited and Restricted Items policy.

Introduction ----------------------------------------------------------------------------------------------------------------- 3 eBay’s Business Model ---------------------------------------------------------------------------------------------------- 3 Strategic Issues and Analysis ------------------------------------------------------------------------------------- 3 - 5    Competitors Challenge

As Tencent announced to take 15% stake of JD.com[1], which is the largest online retailer of China, in March 2014, it also implicated the failure of Tencent’s previous e-commerce strategy. In the

There are many factors that lead Alibaba to sustaining its leadership position in the Chinese e-commerce markets, some of the factors explained in the case are:

The fact that eBay does have some successful competition means that its strategic capability has become less unique. There is a hint in their competitor profile that innovation and perhaps adaptability to different cultures as they innovate is not core to eBay and something which has been developed more successfully by others working within their own national culture. Indeed, eBay rules in its own territory of North America and in Europe. The search capability of eBay also means that niche players do not really make sense, whereas the consumer trust that comes from being a big player is worth everything when trading on-line, as is the notion that whatever you want it will be on eBay because of its size. Thus, the so-called network effects of eBay (the bigger the company, the more successful it will be) and its first mover advantage that has led to this level are key to its success.