Ebay's strategy in China: alliance or acquisition

Résumé du document

When we talk about business, especially e-business and major firms which are well established in this sector, we mostly end up talking about American companies, because most people consider America as ‘the land of opportunity'. I definitely agree with this, because majority of the well established firms have their origin in the U.S. However, the same can be said for China these days. In fact, the Internet is playing a huge role in small businesses, because it facilitates economic growth. For example, one of the earliest attractions about the Internet was the global interest for retailers and wholesalers, in terms of market place. The modus operandi is simple: buyers and sellers could meet online (there is no store location), they can conduct a business, and exchange a product for money through websites.

The first company that made it possible to sell products on the internet was eBay. In fact, in this online auction house (like taobao.com and alibaba.com in China), buyers and sellers never meet, they exchange money for goods and eBay 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). eBay, and in general, all the online auction sites that we have nowadays, are the true embodiment of a ‘frictionless marketplace'.

Extraits

[...] eBay China had to face many challenges in order to remain in the Chinese market. In fact, the Chinese government forces the foreign companies to make joint-ventures with the local operators. Moreover, eBay China had to fight against Taobao, its Chinese rival and leader in this market in China, which took majority of the market shares of eBay; a major disadvantage is that eBay did not provide a telephone support. Tom Online allowed eBay China to have a mechanism to send SMS and MMS to put purchasers in contact with salesmen. [...]

[...] We can consider China to be a very unique market, and probably one of the most difficult to penetrate. If eBay does not learn how to properly tap the opportunities in the Chinese market, the company could encounter serious risks and problems, and as a consequence, it will lose its shares in the fastest growing and most lucrative market in the world. E-commerce is still in its infancy process in the industry cycle life, due to the relative immaturity of the online payment systems, the lack of infrastructure to sell and load online, lack of transparency and regulations, as well as a cultural tendency to prefer offline transactions. [...]

[...] It is necessary to be legally major in order to be registered. Once the inscription is validated, i.e. to be able to buy (after checking the email address indicated in the inscription) and to be able to sell (after identity check of the member by postal mail) (justifying of residence) or banking identification (by the credit card)), each member can: Sell merchandise: - If new, then the marketing activities are subjected to the local legislation of the country - the sale of services, e-books and certain objects is strictly supervised, even prohibited according to the countries. [...]

[...] Web applications and development in China often adhere to high standards. Many domestic sites such as Alibaba and Sohu have made it to the top of the competitive industry. Many web developing companies from Taiwan, South Korea and sometimes the USA have also made Chinese territory as their development base for their web applications. In fact, China offers a large pool of competitive and highly qualified web developers. It will be significant to examine the level of corruption in this country. [...]

[...] However, the same can be said for China these days. In fact, the Internet is playing a huge role in small businesses, because it facilitates economic growth. For example, one of the earliest attractions about the Internet was the global interest for retailers and wholesalers, in terms of market place. The modus operandi is simple: buyers and sellers could meet online (there is no store location), they can conduct a business, and exchange a product for money through websites. The first company that made it possible to sell products on the internet was eBay. [...]