Why Ebay Failed in Asia Essay

There are many major competitors for EBay. Of the many companies that are in the same industry which are at the top of the Hoovers in depth list is Amazon, Google, Overstock.com, Walmart.com, HSN and the list goes on. The industry that these companies are in is a multibillion dollar industry. All these companies know that the consumer is their main concern. The consumer will always have a these companies doing all they can so that they stay on top.[6]

EBay is an American transnational corporation that utilizes an online interface to transmit its business globally. To become a transnational corporation your business must facilitate its operations in more than one country. EBay hosts an online marketplace where consumers and merchants can trade new and used goods for discounted prices. EBay has made it easier to shop from other countries through the process of deterritorialization. The website is also a good example of globalizing culture; which will be discussed later in the paper. EBay has not only transformed the online marketplace, but has been especially successful doing so. In an interview conducted with Entrepreneur.com, a former Fortune 500 company IT consultant stated that, “EBay became a $10 billion company selling something used cheaper than new,” (Girard, 2011.) This emphasizes how successful this business has become and what the future may hold for EBay as well as companies alike.

eBay first entered the Chinese market in 2002 by acquiring a 33% stake in its local counterpart, EachNet, followed by a full acquisition a year later in 2003. Critically assess eBay.s choice of market entry strategy for China (use Key Country Matrix), listing both the advantages and disadvantages of its acquisition strategy (use Drivers (YIP) -CAGE Matrix). 30%

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

When looking at eBay’s target market, the segmentation of users appears to be majority males, ranging from 25-34 years old. Over half of the users don’t have kids and also lack college experience. The majority of the people are Caucasian and have a household income of $100,000. After looking at this information there are some good opportunities that eBay could capitalize on.

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

EBay’s threat of entry is high. The business behind eBay is an Internet-driven industry. The main barriers surrounding this industry is the regulation imposed by the government. The government will hold restrictions to some products that are sold in states or countries. EBay has implemented certain restrictions, such as the Trust and Safety Department, that prevent transactions that could potentially threaten restrictions of fraud and consumer protection. Although eBay does not sell any inventory directly to customers, the company is still held responsible for any misguided or unlawful transactions. In this type of industry, safety and brand recognition are very important. EBay has a great job at excelling at their brand recognition. In addition, the barriers to entry are low, however, creating the consumer population to back up such an industry is difficult.

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 re-expansion of eBay into China seems to be a viable probability and a part of the companies plan for the near future. In 2002, eBay established a presence in china with the acquisition of leading auction site Eachnet to form eBay Eachnet. Up until 2005 eBay Eachnet was the leader of the ecommerce market due to their C2C platform. However, with the emergence of Alibaba owned subsidiary Taobao.com (Taobao), eBay Eachnet soon lost its stronghold on the market. This factor combined with a rigid Chinese ecommerce market drove eBay to withdraw business dealings in the country in 2006.

As ubiquitous as eBay is to Americans, it is only a few decades old. eBay was created back in 1995 in San Jose in the living room of founder Pierre Omidyar with his partner Jeff Skoll and it was envisioned to be a marketplace for the sale of goods and services for individuals (Bjornsson, 2001). Meg Whitman was eventually brought onboard to sustain the success and to help hone a better vision for the company: "that eBay is a company that's in the business of connecting people, not selling them things" (Bjornsson, 2001). Part of the widespread success of eBay was founded in the principle that it was not just about auctioning off collectibles, but in upscale markets as well and in creating solid partnerships with brands like GM, Disney and Sun (bradeis.edu). In spite of those tremendous accomplishments, the real success of eBay is in its trading community on the Internet and making it a marketplace that is safe and regulated. "Buyers and sellers are brought together in a manner where sellers are permitted to list items for sale, buyers to bid on items of interest and all eBay users to browse through listed items in a fully automated way. The items are arranged by topics, where each type of auction has its own category" (Bjornsson, 2001). However, despite the massive success that eBay has had in America and in other regions of North America, it has struggled in other marketplaces around the world; something which was indeed a surprise

One of the key components in achieving productive globalization for a business is to develop a sound entry strategy and operational design before launching its products in the competitive global market. This entails understanding the context of the new market and the consumer demand in order to ensure that the company makes at least a normal profit to not incur any losses in this new investment (“Our Solutions”). The reason why eBay struggled to expand in China was that it had failed to assess its main competitor, TaoBao, and its appeal to the consumers. Similarly in Japan, eBay failed to adjust its strategies

Many of eBay's current and potential competitors will not be able to attract the number of registered users' equivalent to or beyond eBay (See Exhibit D) because they do not have longer operating histories and greater brand recognition that has been attained by eBay's network economies from its first-to-market advantage.

On the other hand, 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

Then, companies like Ebay and Amazon grabbed hold of the market and set new standards for online shopping, making customers safe and in control. Before Ebay was launched in 1995, shopping online was unpopular but a few months after launch, consumers and businesses alike started feeling more comfortable with the idea of buying and selling products. Ebay, is a prime example of how e-commerce has helped the spread of globalization. Before the dawn of internet shopping, getting products internationally were impossible unless a local distributor had a direct relationship with an international vendor. Today, I have the power to order naan or chapatti mix from India and receive it in two days

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.