eBay in Japan
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Case Code: BSTR282 Case Length: 12 Pages Period: 2000-2007 Pub Date: 2008 Teaching Note: Not Available |
Price: Rs.300 Organization: eBay Industry: Internet and E-Commerce Countries: Japan Themes: International Business, Globalization Business |
Abstract Case Intro 1 Case Intro 2 Excerpts
"I am not one for regrets, but I still regret we don't have a presence in Japan."
- Meg Whitman, CEO, eBay in 2008.
"When we arrived last year, the 800-pound gorilla [Yahoo Japan Auctions] was already positioned."
- Merle Okawara, President and CEO, eBay Japan in 2001.
"I think eBay learned what it did wrong in Japan. Because of the nature of the auction model, I think it now understands that you have to be the leader in the market. I think it's a smart move for the company to have closed its site in Japan and to wait for another time when it can go in and do what it takes to be the leader there."
- Lindsay Hoover, Vice President, Houlihan Lokey Howard & Zukin in 2002.
eBay Reenters Japan
In December 2007, eBay Inc. (eBay), the US-based online auction company, announced its reentry into Japan, through an agreement with US-based Internet services company, Yahoo! Inc. (Yahoo). eBay and Yahoo agreed to link their auction sites to facilitate cross-border bidding. This would enable the users of Yahoo Auctions Japan to bid for items listed on eBay's US site using their Yahoo Japan ID, and eBay users in the US to buy items auctioned on Yahoo Japan using their eBay ID. On Yahoo and eBay teaming up, Meg Whitman, President and CEO, eBay, said, "We are excited to partner with Yahoo Japan in providing Japanese users with localized site designed to enable them to shop on the eBay marketplace with ease and convenience."
As a part of the agreement, the companies decided to start a Japanese website, Sekaimon. Apart from translating the names and details of the items listed on eBay's US website into Japanese, the site would provide services like overseas shipping and customs clearance. According to Hiroko Sato, analyst at JP Morgan, Chase & Co, Tokyo, "the alliance will create a very attractive service for U.S. and Japanese users as it allows them to purchase items simultaneously in both countries." After several highly successful international ventures, eBay first entered Japan in 2000.
By then, Yahoo was already a well-established portal in the Japanese market and its online auctions site, which had started a few months before eBay's entry into Japan, had started tasting success. eBay found it difficult to establish itself in the Japanese market.
Some of its practices like charging transaction fees and requiring the use of credit cards10 made the going tough for it. By 2002, it was able to garner only a 3 percent share of the Japanese online auctions market. eBay decided to exit the country in 2002. While exiting the country, Kevin Pursglove (Pursglove), spokesperson, eBay, said, "We may come back to Japan sometime when factors are a little more in our favor, but they are not at the current time." The news of eBay's reentry into the Japanese market in late 2007 was met with mixed reactions...
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