Abstract

This case is about the challenges faced by eBay Inc. (eBay), a leading e-commerce company, in the Chinese online trading market. eBay entered China in 2002 by acquiring EachNet, a leading auction site in China and was successful in capturing a considerable share of the Chinese e-commerce market. However, by 2005, eBay failed to attract the Chinese consumers though the company modeled its Chinese site on the lines of its globally successful site. eBay also faced tough competition from local e-commerce companies such as Taobao.com (Taobao). Recognizing the need for having a local partner that was more attuned to the needs of the local customers, eBay entered into a joint venture with TOM Online Inc (TOM Online) to form TOM eBay in late2006.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand the issues and challenges faced by eBay in the Chinese e-commerce market.
• Understand the reasons behind the decline of a market leader.
• Examine the strategies adopted by eBay to improve its business operations in China.
• Understand the business environment in China from the point of view of a foreign Internet company.

Keywords

Strategy, Competition, Business model, Joint Venture, Management, Market leadership, e-commerce, m-commerce, C2C, China, Guanxi, eBay, Taobao, Meg Whitman, Yahoo!, Alibaba, Baidu