Ebay vs. Taobao

Topics: Decision making, China Pages: 3 (1039 words) Published: June 2, 2013
No one can deny the fact that EBay is the world’s most formidable player in online C2C space, however, failed to capture Chinese fledgling market and beat by an underdog Taobao. The essay is going to discuss about some situations related to the battle between Taobao and eBay. THE SETTLED BATTLE IN THE PAST.

While eBay’s consolidation was a sign of failure, Taobao emerged as the clear leader in online C2C space. Although the result was far away from some previous prediction, it was still reasonable from my perspective. There are varieties of factors that caused the outcome, but the essentials are illustrated as below. The External Business Environment

First of all, the differences of business environment between Chinese and US online market are what that matter most. For Chinese consumers, ‘Trust’ is the fundamental of any kind of deal. As statistics have showed, Chinese consumers prefer to choose their trusted brand rather than so-called ‘first class’ seller. Obviously, there are still loopholes of the supports for online auction, especially the norms and laws regulating online behaviors and preventing online fraud. Compared to eBay, Taobao has enormous advantages, for example, integrating an instant messaging service ‘Wangwang’ for buyers and sellers to establish the mutual trust. By contrast, such contact was not allowed in eBay at first. Online business companies must ensure security in every part of the transaction, but eBay didn’t manage to offer that when it initially entered the Chinese market. Secondly, there’s no doubt that the longstanding relationships with key government officials and leaders in the Chinese banking industry contribute a lot to Taobao’s success in the battle. When eBay suffered from the tight control of financial service providers, the scrutiny from different aspects, Taobao had comprehensive information and launched the AliPay without any significant barrier. Similar situations occurred in other fields too, such as delivery...
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