Ebay.S Strategy in China: Alliance or Acquisition
Table of contents
Introduction 3
E-Bay Company 4
The Chinese opportunity 6
The main problem 8
Tom EachNet 11
Benefits 11
Risks 12
Critics 12
Conclusion 14
References 15
Introduction
E-Bay was the first company that made possible to sell products on the internet. Nowadays, internet takes a huge place in business activities and not only for B2C or B2B business but also in C2C. This last point is the main activity of E-Bay.
But this system buyers and sellers never meet, they exchange money for goods and E-Bay doesn’t have to be involved in the most important and expensive part of the e-commerce (or e-business) which is shipping the product (this part is the responsibility of the seller).
E-Bay, and in general, all the online auction sites that we have nowadays, are the true embodiment of a ‘frictionless marketplace’.
In this case we will see the problematic of E-Bay business expense in China. In fact, this country can’t be tackle as the US market for the cultures and the values of the customers. Such system where buyers and sellers never meet and the price only goes up over time was going to have a tough time penetrating the mainstream society.
China know a lot of local competitor on the market as taobao.com and alibaba.com and e-commerce in general rose over 60% from 2004 to 2005, which represents a growth from $43 billion in 2004 to $70 billion in 2005.
So in this paper we will see a presentation of E-Bay and the Chinese market. Then we will focus on the main problem with EachNet acquisition in order to enter on the market. To finish we will present the Tom EachNet joint venture which was a solution of E-Bay in order to increase its market share and we will conclude with some recommendations.
E-Bay Company
E-Bay is a US company offering e-commerce, e-payments and internet communication services globally which was founded in 1995 in California. E-Bay is the world’s online market place enabling trade on a local, national and
Introduction 3
E-Bay Company 4
The Chinese opportunity 6
The main problem 8
Tom EachNet 11
Benefits 11
Risks 12
Critics 12
Conclusion 14
References 15
Introduction
E-Bay was the first company that made possible to sell products on the internet. Nowadays, internet takes a huge place in business activities and not only for B2C or B2B business but also in C2C. This last point is the main activity of E-Bay.
But this system buyers and sellers never meet, they exchange money for goods and E-Bay doesn’t have to be involved in the most important and expensive part of the e-commerce (or e-business) which is shipping the product (this part is the responsibility of the seller).
E-Bay, and in general, all the online auction sites that we have nowadays, are the true embodiment of a ‘frictionless marketplace’.
In this case we will see the problematic of E-Bay business expense in China. In fact, this country can’t be tackle as the US market for the cultures and the values of the customers. Such system where buyers and sellers never meet and the price only goes up over time was going to have a tough time penetrating the mainstream society.
China know a lot of local competitor on the market as taobao.com and alibaba.com and e-commerce in general rose over 60% from 2004 to 2005, which represents a growth from $43 billion in 2004 to $70 billion in 2005.
So in this paper we will see a presentation of E-Bay and the Chinese market. Then we will focus on the main problem with EachNet acquisition in order to enter on the market. To finish we will present the Tom EachNet joint venture which was a solution of E-Bay in order to increase its market share and we will conclude with some recommendations.
E-Bay Company
E-Bay is a US company offering e-commerce, e-payments and internet communication services globally which was founded in 1995 in California. E-Bay is the world’s online market place enabling trade on a local, national and
References: • Capstone Case • http://www.journaldunet.com/ebusiness/commerce/paypal-signe-avec-china-uniopay-0310.shtml • http://www.journaldunet.com/cc/04_ecommerce/ecom_marche_asie.shtml