eBay's Problems in China

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Case Details:


Case Code : BSTR278 For delivery in electronic format: Rs. 300;
For delivery through courier (within India): Rs. 300 + Shipping & Handling Charges extra


Globalization | International Business | Joint Venture
Case Length : 19 Pages
Period : 2002-2007
Pub Date : 2008
Teaching Note : Not Available
Organization : eBay
Industry : Internet and E-Commerce
Countries : China


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).

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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.


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.


  Page No.
eBay Changes its Strategy in China 1
Background Note 2
e-Commerce Market in China 6
eBay in China 7
eBay's China Troubles 10
Joint Venture with Tom Online 11
A Strategic Shift? 12
The Aftermath 13
Outlook 13
Exhibits 15


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

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