Assignment

Assignment

Module 1

E-Bay in Asian Market

E-Bay, the online auction giant is losing ground in Asia. Back in 1995 few thought that E-Bay would have grown up to be the behemoth of internet trading that it has. It did incredibly well in the U.S. for a decade and once it started talking about taking up roots in Asia, most felt that this would be the proverbial, “nail in the coffin,” for any company that had aspirations of becoming a contender in the internet auction battle on a global scale. Amazingly, most were wrong and “Goliath” is being brought down in Asia by several “David's” who sat back, watched and learned from the pioneer. E-Bay did not conform to its market and has failed to adequately keep up with their competitors' incentives.

First of all, E-Bay was a pioneer, taking garage sales to a new and unique level. In 1995 Pierre Omidyar's founded E-Bay in his living room, his intent being to create a place where people could sell each other their goods and services. In 1998 with the help of some clever branding strategies (PEPSICO, DISNEY, AND SUN), and a vision of a company that's in the business of connecting people, not selling them things, E-Bay was on it's way up, fast. Since then the company has become the largest and most productive internet auction company in the world. All it had to do was keep-up with the market and research the needs and wants of their target audiences.

E-Bay dominated the market while making trading over the internet easier for the consumer. It (along with the people) had the product, and E-Bay did a great job of promoting it for a nominal fee (a fee nonetheless, which would be part of their demise later). At the onset the fee was not much of a concern because the target market was making money and so was E-Bay, a very symbiotic relationship. Over the next several years many smaller online auction sites began to spring up around the internet, but thanks to the branding that E-Bay secured early on, it rose above all others in the U.S.

1998 - Besides dominating the United States, E-Bay was currently in 7 markets, including the United Kingdom, Germany, Austria, France, Canada, Australia and Japan. It had its sights set on Asia and its 16 million inhabitants, one third of which was online. In the middle of 2000 E-Bay bought a majority ownership of Internet Auction, Korea's largest auction type web site. So how could it possibly go wrong? E-Bay took its eye off the ball and lost touch with what the market was looking for, less expensive ways to trade.

1999 - China launches ALIBABA.COM. Just like Pierre did four years prior, Jack Ma launched Alibaba.com from his living room in China. How simple it must have been for Jack Ma, while sitting in his living room to have seen the future, and gathered up 18 of his friends and started a company just like E-Bay, in ...