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Case 15-2 “Ebay in Asia”

In: Business and Management

Submitted By vanessa87569
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1. Analyze the key factors that have caused eBay to struggle in Japan, China, and other Asian markets to determine if these mistakes could have been avoided.
One factor that has made eBay to struggle in Asian countries was its failure to recognize the differences that existed between the Asian markets and market users and the American markets and markets users. This lack of understanding made eBay to use the strategies it had used in the US to enter the Japanese and the American markets. At the initial launch in Japan eBay set out to use collectibles this strategy was successful in the US market. This seemed to have failed as the Japanese user seemed to have preferred new products. The second mistake was eBay strategy to charge commission on each transaction as it did in the US. The Japanese market did not favor this as they were not used to pay commission or monthly charges. The second factor that made eBay to struggle in the Asian markets is its strategy of attempting to dominate the market by crashing all competition including the local. This proved to be a wrong kind of strategy as local competitors had a competitive edge over eBay. This was demonstrated by eBay earlier battle with Alibaba for the control of the Chinese market which eBay ended up losing badly to the local players. Due to the differences in market and business environments in Asia local companies that are used to these environments usually find an edge over foreign entrants and strategies such as that used by eBay have high probabilities of failures. Foreign players also end up incurring a lot of cost and therefore lose their competitiveness. Since eBay management team did not understand the local market they spend a lot of money doing the wrong things leaving their competitors to claim the market at a lesser cost (Wang, 2010).These mistakes by eBay in its strategy to enter the Asian markets…...

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