Ebay in Asia
1. Why has eBay struggled in Japan, China and other Asia markets? eBay is an online auction service whose business model is ideally suited to the Web. EBay stores no inventory and ships no products. Instead, it derives its revenue from the movement of information, an ideal task for the Internet. EBay has taken its model to numerous foreign markets and been successful, particularly in England, France, and Germany, however, eBay has failed to achieve the same success in the Asian markets.
There are several reasons behind eBay failure in Japan, China and its slow growth in other Asian markets, such as:
• Global Brand Image vs. Localization: failure to localize the brand to appeal to Asian costumers. Understanding how to localize a brand can do wonders for a company.
• Use success in the US as proof-of-concept. This leads to over-confidence. The fact eBay dominates in the US or Europe means little to Asian costumers
• Failure to understand and adapt to local market and culture
• Failure to react quickly to local competition
• Poor decision making between headquarters and local management
• Low-key approach to marketing
In Japan. eBay's failure in Japan was a series of missteps. Firstly, eBay joined the market five months after Yahoo auctions, giving its competitor a massive head start to establish itself. In auctions, there is a significant first-mover advantage. A site with more sellers attracts buyers and more buyers bring sellers. This was a lesson both companies had learned through a very different experience in the U.S, where eBay led the way and Yahoo! tried with limited success to build an auction business in its shadow.
Jack Ma believes EBay's failure in Japan was due to an inability to build what he calls the 'community effect' in the country. For Ma, the community effect begins with customer satisfaction. And, eBay failed to understand the Japanese buying psyche. They tried to target the younger market, and forced them to pay by credit card, but
There are several reasons behind eBay failure in Japan, China and its slow growth in other Asian markets, such as:
• Global Brand Image vs. Localization: failure to localize the brand to appeal to Asian costumers. Understanding how to localize a brand can do wonders for a company.
• Use success in the US as proof-of-concept. This leads to over-confidence. The fact eBay dominates in the US or Europe means little to Asian costumers
• Failure to understand and adapt to local market and culture
• Failure to react quickly to local competition
• Poor decision making between headquarters and local management
• Low-key approach to marketing
In Japan. eBay's failure in Japan was a series of missteps. Firstly, eBay joined the market five months after Yahoo auctions, giving its competitor a massive head start to establish itself. In auctions, there is a significant first-mover advantage. A site with more sellers attracts buyers and more buyers bring sellers. This was a lesson both companies had learned through a very different experience in the U.S, where eBay led the way and Yahoo! tried with limited success to build an auction business in its shadow.
Jack Ma believes EBay's failure in Japan was due to an inability to build what he calls the 'community effect' in the country. For Ma, the community effect begins with customer satisfaction. And, eBay failed to understand the Japanese buying psyche. They tried to target the younger market, and forced them to pay by credit card, but