Ebay Case Study
CASE: EBAY EXPANDS AROUND THE GLOBE
Retail Management: A Strategic Approach
Berman and Evans
As recently as 2000, eBay had virtually no international operations. Then, international expansion became a major strategic initiative. By 2005, the firm had Web sites in 31 countries around the world – ranging from Brazil to Germany to China. eBay’s 2005 foreign operations generated well over US$1 billion in revenues, accounting for 46 percent of eBay’s trading revenues. By 2008, 54 percent of sales of eBay’s shopping Web sites and 43 percent of the revenues generated through eBay’s PayPal division (eBay’s online person-to-person payment processing business) came from global markets outside the United States.
eBay has succeeded abroad because its global strategy is flexible enough to adapt to countries with different cultures, while retaining the core elements of its online business model. The global strategy is based on a playbook that is a “how-to” manual that covers such topics as online marketing, category management, and community outreach. The playbook, which is constantly updated, consists of several hundred Web pages that summarize the ongoing collective wisdom of all of eBay’s worldwide managers.
eBay’s playbook details how to drive customer traffic to a local eBay site through online ads at a country’s most popular Web sites and search engines. The playbook also dictates that products, information, and chat groups be created by buyers and sellers in that country. Thus, eBay looks and feels like a particular foreign country’s Web site brand. This strategy also avoids problems associated with a cookie-cutter approach to Web site planning on a global basis.
Meg Whitman, who became eBay’s CEO in 1998, originally wanted to perfect eBay’s concept in the United States before going abroad. However, she soon realized that many small competitors were springing up around the world. She became concerned that unless eBay went global, she would
Retail Management: A Strategic Approach
Berman and Evans
As recently as 2000, eBay had virtually no international operations. Then, international expansion became a major strategic initiative. By 2005, the firm had Web sites in 31 countries around the world – ranging from Brazil to Germany to China. eBay’s 2005 foreign operations generated well over US$1 billion in revenues, accounting for 46 percent of eBay’s trading revenues. By 2008, 54 percent of sales of eBay’s shopping Web sites and 43 percent of the revenues generated through eBay’s PayPal division (eBay’s online person-to-person payment processing business) came from global markets outside the United States.
eBay has succeeded abroad because its global strategy is flexible enough to adapt to countries with different cultures, while retaining the core elements of its online business model. The global strategy is based on a playbook that is a “how-to” manual that covers such topics as online marketing, category management, and community outreach. The playbook, which is constantly updated, consists of several hundred Web pages that summarize the ongoing collective wisdom of all of eBay’s worldwide managers.
eBay’s playbook details how to drive customer traffic to a local eBay site through online ads at a country’s most popular Web sites and search engines. The playbook also dictates that products, information, and chat groups be created by buyers and sellers in that country. Thus, eBay looks and feels like a particular foreign country’s Web site brand. This strategy also avoids problems associated with a cookie-cutter approach to Web site planning on a global basis.
Meg Whitman, who became eBay’s CEO in 1998, originally wanted to perfect eBay’s concept in the United States before going abroad. However, she soon realized that many small competitors were springing up around the world. She became concerned that unless eBay went global, she would