Ebay: Connecting in China
eBay: Connecting in China
December 1, 2005
The Problem: Causes and Symptoms The problem for eBay is how to factor the new Chinese business landscape, its conditions, culture and constraints so that it can penetrate into the large Chinese market. This is the challenge identified because Whitman, the company’s CEO, has announced that the goal for the company is to reach the $3 Billion sales level by 2005. In order to reach this new milestone, the company would need to look for key markets abroad and expand through them. And the biggest and most promising among the potential expansion points is China.
However, not all international markets are equal and exhibit the same characteristics. Internationalizing companies such as eBay would need to modify their firm to fit to the requirements of their chosen countries, while retaining their core competencies. This is the process of “Glocalization.” Therefore, how eBay would respond to China and its distinguishing features is attuned to this glocalization process. If China had a very similar landscape to eBay’s US mother country, with the same buying habits, same transportation infrastructure and same internet access among others, then there would be no problem with China’s landscape; or, the problem identified would be entirely different. eBay would simply have to carbon-copy its experienced US operations into the Chinese market. However, the Chinese market is unique. And in our given case, the characteristics that this country has in contrast with the US are markedly different. Ultimately, how these unique factors are taken into consideration by eBay into its market penetration strategy can either hamper or strengthen its growth towards 2005.
Situation Analysis The situation in China calls for eBay to establish a foothold at the start of a trend when internet usage is just starting to surge upwards. Although now in 2005, we know that China has just passed the 80 million mark in the number of
December 1, 2005
The Problem: Causes and Symptoms The problem for eBay is how to factor the new Chinese business landscape, its conditions, culture and constraints so that it can penetrate into the large Chinese market. This is the challenge identified because Whitman, the company’s CEO, has announced that the goal for the company is to reach the $3 Billion sales level by 2005. In order to reach this new milestone, the company would need to look for key markets abroad and expand through them. And the biggest and most promising among the potential expansion points is China.
However, not all international markets are equal and exhibit the same characteristics. Internationalizing companies such as eBay would need to modify their firm to fit to the requirements of their chosen countries, while retaining their core competencies. This is the process of “Glocalization.” Therefore, how eBay would respond to China and its distinguishing features is attuned to this glocalization process. If China had a very similar landscape to eBay’s US mother country, with the same buying habits, same transportation infrastructure and same internet access among others, then there would be no problem with China’s landscape; or, the problem identified would be entirely different. eBay would simply have to carbon-copy its experienced US operations into the Chinese market. However, the Chinese market is unique. And in our given case, the characteristics that this country has in contrast with the US are markedly different. Ultimately, how these unique factors are taken into consideration by eBay into its market penetration strategy can either hamper or strengthen its growth towards 2005.
Situation Analysis The situation in China calls for eBay to establish a foothold at the start of a trend when internet usage is just starting to surge upwards. Although now in 2005, we know that China has just passed the 80 million mark in the number of