Why Does E-Bay Have Problems in Its Asian Markets?

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Why Does E-Bay Have Problems in Its Asian Markets?

By | Feb. 2012
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Why Does E-Bay have problems in its Asian Markets?
Lawrence B Henry
Dr. Hunt International Business 401

E-bay jumped into the Asian markets in early 2002. Initially eBay performed at an exceptional level, demonstrating the companies’ ability to excel in the Asian Market. So, why now is eBay having such a hard time with this market, which appeared so ripe for the picking? In the next few pages, I will give my opinion as to why eBay has fallen from the top position in China and South Korea’s online-auction Market.

When eBay jumped into the Asian market, it did so through an initial investment of $30 million in the Chinese online auction company EachNet, and completed the acquisition in 2003 with an additional $150 million. (The Wall Street Journal, 2006) The initial popularity of eBay and the subsequent success appears to have come from the companies’ ability to offer different options in the online-auction market. The company accomplished this with a variety of different products such as pricing, availability, payment methods and access over their number one rival Yahoo, who through its numerous subsidiaries at the time of eBay’s entrance into the market, held the top position in online sales throughout the Asian market. Their entrance into the China and South Korean online-auction markets allowed people of these two countries the ability to decide for themselves which company offered the best services when using online-auctions to buy and sell. The timing of eBay’s entrance into the Asian market appeared to work as they assumed the position as the number one provider of online-auction services in these countries until 2005.

Since 2005, eBay has fallen from the top position as South Korea and China’s top online-auction provider. This happened largely due to new start up companies that are offering new products and services to the consumers in these countries; much like eBay did when they entered the Asian Market. One such company Gmarket,...

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