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China is one of the biggest countries in the world and also it is one of the most populated countries in the world as well. It has the potential for manufacturing led boom and gradual integration. These characteristics may attract many foreign investors to invest in this country because they think they are huge opportunities fir having great profit in this country. Internet is one of those areas that attracted many investors in China in its initial stages of introducing as anew technic for communication and shopping and banking in all around the world in the mid and late 1990s. They also became famous in E-commerce. In 2002 the number of internet users in China was 59.1 million which showed 4.6% penetration rate. This rate was almost reached to 6.2%. it was predicted that between 2006-2010 there would be more and more online shoppers in China which may use C2C, B2B or B2c ways of online shopping. Such a huge market and customers has encouraged many foreign auction website to come and invest in this country. EBay first came to China in 2002 by acquiring 33% of share of each net company. They didn’t buy the whole market share of this company because they knew that this market is a little bit different from other markets and although it has big opportunities for earning profits but because of some potential risks which are available in this huge market ,companies need to penetrate in to it gradually and very careful. There were so many problems which needed to be considered before entering in to Chinese market. Some of those problems can be listed as high rates of accessing to internet in different parts of china and also slow speed of internet in this country. There was also instability between technology and economic development in different parts of this big country which could create many big problems for entering in to this market. Another important problem was lack of a credible credit system for online payment in China . In this way customers were always afraid of hackers who may enter in to their account and know all the details about their money there. There was not an appropriate legal system for protecting the rights of buyers and sellers on those days which could create a lot of problem for buyers because they were not sure that they would receive their order after they paid all the money. Some other existing problems in Chinese market were corruption and currency problems as well as lack of transparency in business transactions. By observing all these potential risks available in Chinese market, EBay Company decided to change its strategy for entering in China. They decided to use gradual penetration strategy for entering in to this market. Another important factor which had an undeniable role in changing the strategy of EBay Company while entering in to Chinese market was their big lesson from their failure in Japan. Their investment in Japan was the first experience of EBay in Asian pacific countries which was a total lost for this company. On those days Yahoo was a very tough competitor for EBay in China which had just entered a little bit earlier in to the Japan market. So they knew that for entering in to another country in this part of the world they should be really careful. In 2002 they bought 33% of Each Net market share and entered in to the Chinese market .It was the first Chinese auction website and it had Chinese language platform and very rich knowledge and strong domestic and international experience. In 2003 after they saw the success of this company in the business, they bought the rest of its market share and rebranded it EBay Each Net. This company was successful in the beginning but after a while it faced many problems and lost its share on the market which can be considered as a failure for EBay in Chinese market.
Entering in to new market is as a...
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