Ebay in China

Topics: EBay, Electronic commerce, Online auction business model Pages: 7 (2703 words) Published: March 26, 2012
eBay: How can eBay build its culture in China
I. Overview
eBay is an online provider of marketplaces for the sale of goods and services. It also provides commerce, platforms, online payments services and online communications. It offers products and service to individuals and businesses. Established in 1995, the company operates in the US and other international markets with employs 16,400 people. eBay keeps its leadership position in the new industry – C2C (consumer to consumer) (Ou and Banerjee, 2005) market with the recorded revenue of $87 billion (datamonitor). It owns lots of websites including the auction websites and online payment websites under its brand name across the world. In China, There are a lot of C2C platforms in the new emerged market, such as TaoBao, PaiPai and eBay (China). Taobao is a China based local C2C platform which Founded in 2003 by Alibaba Group after Ebay acquired Eachnet in China. It mainly caters to consumers in mainland China, Hong Kong, Macau and Taiwan. Within short 3 years, it has quickly developed the leadership position in the e-commerce industry in China. As described by Moss (2006), however, during the year of 2006, eBay quit its C2C market because of the pressure of local business competition. In China, in order to build a trustful relationship and a kind of confidence to take into the activities of online buying and transactions, C2C platforms encourage buyers to contact sellers. Also, buyers will negotiate the price and products detail with sellers through the communication. China is a big population country with 1.3 billion people. It is a big source for the C2C e-commerce market. As one Beijing-based Western commentator has said: ”The road to internet riches in China is paved with corpses of American giants, and the body count continues to grow.” So in this research paper, I will address the problems that restrain eBay to develop in China and find the ways for eBay to make its success in China. II. Problem Statement

With the strong leadership and power in US, however, eBay lost to TaoBao in China which is a wholly owned subsidiary of Alibaba - China’s leading e-commerce company. Taobao has the highest volume of transactions (RMB 43.3 billion in 2007, with a C2C market share of 83.9% in China) and with more than 80% million registered users. It is the highest penetration rate among the 253 million internet users in China. In the website Alexa, it ranks TaoBao as the No.47 most visited web site globally, the No.5 in China (Ou, Davison, 2009). Grey flashing icon indicates offline sellers

Grey flashing icon indicates offline sellers
Blue flashing icon indicates online sellers
Blue flashing icon indicates online sellers
Taobao not only has its positive leadership in China, it has its unique features to attract Chinese buyers. On the Taobao’s user interface, it use a bi-polar colorized icon to indicate the statue of the sellers: you can see the picture below, a blue flashing icon indicates that the seller is online, and you can talk with the seller immediately; the grey static icon indicates the seller is not online. That means an intended buyer can check if a seller is online, and if so, the buyer can use the TaoBao’s embedded IM tool which is Aliwangwang to contact the sellers. Aliwangwang, which is an instant messenger, embed in the Taobao website, and it allows buyers to take Pseudonymous communications, share the user IDs with sellers. Moreover, Aliwangwang is a default and free-of-charge IM system for all Taobao users. eBay Inc. has its Chinese online auction website called eBay (China) (www.ebay.com.cn). eBay (China) was built in 2003 from EachNet (1999 )before the found of Taobao. It was the first Chinese C2C online auction platform at that time. Until 2006, the situation was changed dramatically; eBay lost to its rival Taobao and quit its C2C arena in China. After several months, it cooperated with a new partner TOM Online and reappeared on the market as a new...
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