eBay's Operations in China and Japan

563 Words Jan 15th, 2018 2 Pages
eBay struggled in the different Asian markets for two reasons. The first is that they did not have first-mover advantage. In each case, there were other competitors available whereas in the US eBay had a clear-cut first-mover advantage. The major reason, however, is that eBay entered these markets without truly understanding, or adapting to, the local market conditions. Both the Japanese and Chinese markets are different from the American market. The decision to have a sales commission in Japan, for example, cost eBay substantial business because it was not only a barrier to listing but also likely clashed with the Japanese view of the site's role. A loss-leading strategy with no commission would likely have improved its competitive footing against Yahoo significantly. eBay's understanding of the Chinese market was equally flawed. Again, when eBay launched in China it brought its basic American business model to the country. There were subtle differences in the approach that competitors used that fit more closely with the needs of Chinese consumers. As a result, competitors were far more successful and eBay was forced to all but withdraw from the market.
2. Yahoo had no commissions, which was basically a loss leader to build market share rapidly. In contrast, eBay entered Japan with a commission and this dissuaded customers. Yahoo also focused on new products whereas eBay did not, again showing that it did not truly understand the Japanese market. In China, eBay again…

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