eBay in Japan

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Case Details:

Case Code : BSTR282
Case Length : 12 Pages
Period : 2000-2007
Pub Date : 2008
Teaching Note :Not Available
Organization : eBay
Industry : Internet & E-Commerce
Countries : Japan

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Background Note

eBay was founded by Pierre Omidyar (Omidyar), a software programmer, in 1995 as AuctionWeb. eBay was incorporated in May 1996. It was a person-to-person trading community, where sellers could list the items they wanted to put on sale, and specify the minimum bid and duration of the auction...

eBay's International Ventures

eBay's international ventures began in late 1998. Due to growing competition in the US from websites like Amazon, Yahoo, and AuctionWatch, eBay began exploring opportunities in other markets...

eBay in Japan

In February 2000 , eBay entered into a joint venture with NEC Corporation (NEC), to form eBay Japan; NEC held a 30 percent stake in the company while the rest was held by eBay Inc...

What Went Wrong?

Several reasons were cited for eBay's failure in Japan. According to analysts, however, the main reason was the dominance of Yahoo Auctions in the Japanese online auctions market. Yahoo having entered Japan in 1996 through a joint venture with SoftBank made the right moves to become the largest Internet access provider and the largest portal in Japan...

The Aftermath

After its Japanese misadventure, eBay chose to expand into countries like China and Taiwan by acquiring leading auction websites, where it relied on local brands for growth and market share. According to Sherif Mityas, a vice president in the consumer business and retail practice at A.T. Kearney , "Two important issues for companies like eBay are novelty and loyalty. In North America, where eBay was one of the first companies to institute the Internet auction model, it is enjoying both. Its experience in Japan, however, has taught it that if you're not the first one in a market, it is very difficult to get people to use your site. In those markets you have to buy the leaders, and the loyal customer bases attached to them."...


Exhibit I: eBAY Japan's Homepage
Exhibit II: Internet and E-Commerce in Japan

Business Strategy Case Studies | Case Study in Business, Management, Operations, Strategies, Case Studies

8] Sekaimon in Japanese means 'Gateway to the world'.

9] Masaki Kondo, Kiyotaka Matsuda, "Yahoo Japan Shares Gain on Online-Auction Alliance with eBay,"www.bloomberg.com, December 04, 2007.

10] Japan was largely a cash-based society, and the use of credit cards was limited.

11] "Sayonara: For eBay, Japan is the Land of Setting Sun,"Seattlepi.com, February 27, 2002.

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