BUS401 - INTERNATIONAL BUSINESS

Why does E-Bay have problems in its Asian Markets?

International Business

Why does E-Bay have problems in its Asian Markets?

This case assignment examines the problems that E-Bay is facing in the Asian Markets that include China and Korea. E-bay, the king of online auctions around the world is falling from the throne as aggressive rivals move up to control more of the market share. Local and international rivals are tapping into their profits, as E-Bay moved down into the number two position in China and in South Korea. The company TaoBao which Yahoo owns 40% has now taken the top spot in China and local competitor Gmarket has taken the top spot in South Korea over once giant E-Bay. E-Bay is steadily losing its market leadership to Taobao, which maintains over 67% of mainland China's online auction market. E-Bay invested over $100 million in China to fight this fast rising company, but they are still losing ground.

Many factors that are in play are contributing to the decline of E-Bay in the Asian Market. Many people feel that E-Bay has failed to understand the unique Chinese marketplace and culture. E-Bay in direct contrast to its competition Taobao, provides no phone support to its customers and highly discourages buyer-seller contact that could lead to haggling. Haggling is a part of the Asian culture that allows the consumer the perception that he is in control of the transaction. China's culture makes them great mimickers but they lack innovation and the ability to put new ideas into play. According to Rob Hoff of Business Week, when you are doing business with China they will accept you with open arms at least until the Chinese have a better understanding of your business concepts. Once they get a grasp of your techniques they ...