Growth Strategies Case Study

eBay in China- A Difficult Bid

OR

Abstract:

By 2007, eBay Inc., a leading online service provider offered online goods and services, payments services and communication offerings to a diverse community of individuals and businesses.

eBay was present in more than 18 countries. It entered in one of the most challenging and fast growing market of China in 2002. Though the market offered huge potential for growth, eBay encountered many hurdles. eBay was the pioneer in the online auction business in China through its acquisition of Eachnet which controlled 80% market in China for C2C transactions. Though eBay had captured the online auction market in the U.S., it made the mistake of using its American model in Asian countries.

In 2003, the popular Chinese B2B Web portal Alibaba.com started Taobao.com, a consumer auction site and became eBay's biggest rival. eBay lost vital market share to Taobao. In 2006, eBay accounted for only 29% as compared to Taobao’s 67% in the Chinese online auction market. In 2006, eBay decided to change their approach in China closing their foremost website in China and partnering with a local associate, Tom Online Inc., a popular Internet portal and wireless operator based in Beijing. eBay formed a minority stake joint venture with TOM Online.

The case discusses the challenges eBay faced in China for its growth.

Pedagogical Objectives:

• To understand the competitive e-commerce industry in China
• To discuss the entry and growth strategies of eBay in China
• To argue when the first mover might have disadvantages
• To discuss the future strategies of eBay in China.

Keywords : Offshore outsourcing; Service operations; Managing risk and fraud; Service performance improvement, eBay; China; Taobao; e-Commerce; Growth Strategies Case Study; On-line auction; Alibaba.com; Yahoo!; Competition; Revenue model; On-line payments; Emerging markets; Marketing strategy; Competitive strategies; Asian markets; Chinese Internet market

Contents : 

The E-marketplace
China e-commerce Industry
eBay in Asian Continent
eBay's Chinese Challenge
Chinese Partnerships: Collate to Dominate
VII-Strategic Acquisitions & investments