About eBay in China

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eBay remains the world's biggest auction site and continues to operate on a global basis; however, its expansion into China met with unexpected results, something many Internet users remain unaware of. The existence of an eBay China is assumed but far from reality.

Background

  • In the heyday of the late 1990s, eBay emerged as one of the leading wunderkinds of the .com era. Propelled to sudden success, the company began to grow outside the U.S., opening storefronts in Europe and Asia. Circa 2001, another hype phenomenon came to a head: the China buzz. This led to eBay joining the go-east crowd looking for local opportunities.

Establishment

  • In 2003, eBay finally cemented its move, buying up the mainland's leading auction site, Eachnet, which was quickly rebranded eBay China. At first, all went well, but the transition proved problematic to many customers who weren't used to the U.S.-inspired eBay interface.

Competition

  • Local outfits soon arose to challenge eBay's fresh entry into the Chinese market. Alibaba's Taobao brand spearheaded this charge, swiftly converting most of eBay China's users--eBay's market share dropped from 85 to 30 percent in a couple of years. By 2007, Alibaba and Taobao came to stand for online auctions in China, not eBay.

Rebranding

  • In 2007, eBay was forced to relinquish its China operations after spending more than $300 million on setting up in the country. The Eachnet brand was restored, and eBay China ceased to exist. Also, ownership of eBay China moved to Tom.com with eBay controlling 49 percent of the company.

Deciding Factors

  • eBay claims China is still not mature enough to support the kind of transacting more developed areas of the world display. They believe China is geared towards export even on the auction level, hence most sellers use international sites rather than domestic versions. Other factors include abandoning the familiar Eachnet, allowing Alibaba and Taobao to maintain an edge in attracting locals and charging sellers while other sites were free. Also, eBay China didn't tap into Eachnet's experience; most of that company's execs used the takeover as a way to immigrate to the U.S.

Current Status

  • While eBay has successful stores in Taiwan, Japan, Hong Kong and other Asian locations, its eBay China site is defunct and as of this writing leads to a revamped Eachnet storefront.

References

  • Photo Credit Image by Flickr.com, courtesy of Jakob Montrasio
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