It looks like a couple of factors may be leading eBay to leave the Chinese market completely. Shanghai Daily is reporting that eBay has agreed to sell eBay’s China division and its PayPal service to Tom.com, a company that already distributes eBay’s Skype service to the Chinese market.
Two reasons are cited. First, eBay, which had as much as 90% market share in China for C2C transactions, has lost significant market share to upstart (and free) rival Taobao. eBay is now left with just less than 30% market share for C2C transactions, even after moving to eliminate transaction fees in China a few months ago.
Second, China is preparing new regulations limiting foreign ownership of companies operating online payment systems. After looking unsuccessfully for a partner on its Chinese PayPal service, eBay faces significant regulatory problems.
This comes on the heels of the departure of eBay China’s CEO, Martin Wu. PayPal China’s GM, Liao Guangyu, will take over Wu’s job.
No word from eBay on this yet. Until then, this is speculation, not confirmed fact. As bloggingstocks suggests, this may only be a move to simply partner with another strong player in the Chinese market, as Yahoo has done with Alibaba.
While its certainly significant that eBay is apparently leaving the Chinese market, what interests me most about this move is how effectively a startup ate into eBay’s market share with a zero price strategy. This is something that has been tried and failed repeatedly in the U.S. Perhaps it’s time to try again. First someone needs to address the lock eBay has on user feedback/reputations (see our posts on Rapleaf, a startup addressing this market).
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Surprised to see that Ebay is leaving China, but to be honest, Taobao is really doing well there!
God I hate eBay. They are evil. Any negative news about them always brings a smile to my face.
eBay did something different in Taiwan. They failed to fight with Yahoo! TW in auction market , so they turn to form a joint venture with PCHome, the largest EC company in Taiwan. The website name is called Ruten (www.ruten.com.tw), it means outdoor market….sounds very close to the Japanese leading EC site Rakuten (www.rakuten.co.jp).
I think that it´s a non respect accion for your clients. If you have in your country every day consumers, and this consumers pay for your services, you -in this case, ebay a few month ago- can´t gave free the same service in other market/country. The same think happend in all over the word.
Best wishes, from Argentina.
eBay is going downhill so hard it’s not even funny. I used to work there until last year, and the entire place is declining rapidly. People are no longer motivated, and the good people have been leaving in droves starting about two years ago. eBay is no longer “hip”. It’s actually becoming kind of lame to be excited about eBay at this point. I think eBay had the coolness factor going for it in 1998, or perhaps even until 2002, but who wants to hear anything about eBay anymore now? There is nothing more to be said. The site is full of grandmas selling useless garbage, the stock is in the shitter, and if you want to buy stuff there are so many alternative sites it doesn’t make sense to use eBay anymore. Buying Skype was a total act of desperation and confirmed the dire situation.
I know of one start up in semi-stealth mode (sorry no mentions here) in the US who is building something that just might knock ebay square in the face. I think its been in the works for 2 yrs. I strongly believe eBay will have to buy them to hold their market positioning. Im sure the other big co’s will want them too.
What Ebay needs to do (to capture the Chinese market) is to offer Black Audi’s, Mercedes Benz’s, BMW’s and other expensive consumer items to the new Communist elites and their croonies. Ebay just does not know how to use Guanxi or bribe the correct officials to get into the game.
Ebay should offer expensive cars, villa’s, Cayman Island bank accounts, 2,3,4th mistresses and wives and promote themselves as “Harmonious” on CCTV 9.
China is the most corrupt place (san Africa) in the world.
No other place in the world can you observe Government officials driving around with their mistresses in expensive cars next to peasant farmers pulling donkey carts on the 4th ring road of Beijing. Of course these outstanding government officials are able to have this type of lifestyle with a whopping 5000 RMB a month salary.
Chinese you best start looking at what your government has given you.
1. massive corruption
2. Income gap
3. Greed and cultural failure
4. Pollution that will destroy your children’s future for a few extra yuan
5. Massive poverty in the countryside
Ask yourself, how much of the 10% GDP have you seen in your life or paycheck?
Now how much has the government officials seen of that 10% 9.999%!
Ebay is better to be out of the mess.
Yay, China is in a “I can’t get into your market and neither can you get into mine” paradise!
I see a Tom Online acquisition in the near future…Google, Baidu, or Alibaba /Yahoo.
Microsoft doesn’t have much of a presence in China and definitely not in commerce. Considering the emerging China market I’m not sure if they would make a play or not. It’s quite terrible to see eBay pull almost completely out of the market in asia.
Though what some might realize, there isn’t exactly an defined way to gain market share and traction in asia…unless it’s free to use.
The China internet market is still rapidly expanding and the consumer segments have yet to settle. It’s a very different internet game for businesses to play versus the US or Europe.
It’s a smart move for eBay.
As for the other markets, eBay just needs to become efficient and lean. They’re definitely focusing on the leaks and fine tuning.
Well, you probably need an economy that is less command and more market oriented for a business like eBay to succeed.
You can see how well free listing works over at edgeio.
Paid listings weed out the crap, edgeio is all crap, but the listings are free.
I’ll stick with eBay
Perhaps free listings are not the reason why eBay lost.
Yahoo was smart enough to leave china early, when they sold their local venture to Taobao…. this guy is real hungry and eBay will definitly need to fix their business model.
Better late than never…!! Best of luck to ebay
anyone besides me think the chinese are playing dirty…this is why the Bush administration sucks…they should be protecting/promoting american business….”the business of America is business” some former president.
Currection : Please read Taobao as Alibaba. Sorry for the wrong word
oh no.
I can not read techcrunch stories via my feed reader anymore:(
all it gives me is just a few lines from the beginning of the story. oh no man.
mike, why did u do this to your 120 000 readers.
one hundred and twenty thousand readers, come on man.
this is wrong move…
an update:9
my netvibes reader started to display complete story…
love techcrunch
Yeah, this is big news, especially for eBay third-party developers.
The trackback does not seem to work. My comments are here:
http://pingit.wordpress.com/20.....-and-asia/
good, a drop in market share becase of competition is good, ebay is a horrible company that thrives of scamming people, glad to see the chinese figure that out cause americans are quite slow to the beat on that. unfortunately you cant petition the government for laws to keep you open, and kill any other startups in stage 1
Taobao has a very knowledgaable management team who seems to have a better understanding of the market.
1. massive corruption
2. Income gap
3. Greed and cultural failure
4. Pollution that will destroy your children’s future for a few extra yuan
5. Massive poverty in the countryside
==========================
Hi, Mao Ze Dong , you blurted out the secret that chinese communist party and western main stream media tried hard to conceal. Be careful if you live in china
Good analysis by Ping Liang and the aptly named Mao Zedong. Chinese companies are winning because they understand the market better and the power of guanxi. And if you don’t know what that word means you’ll never get anywhere in China ;-).
It was the chat feature on Taobao that did ebay in. Chinese love to chat. eBay thought it could just skate by on it’s international branding and just a little ad spending here. Don’t forget Taobao’s relationship with Alibaba, thus tons of financing coming in to support it. (indirectly via Yahoo, etc.)
A foreign company will never have the guanxi of a chinese one. Period.
Hopefully you can pay out enough bribes to officials to get the marketshare you need to lead. It’s very short term, but it may give you the advantage.
Alibaba has street smarts, as evidenced by their reaction to being banned from eBay Live conferences. In 2005, the eBay conference was full of people carrying bright orange Alibaba bags given out on the street by temps they had hired.
In contrast, eBay has become very “corporate.” In fact, I suspect some managers disdain the sellers and items on their site, preferring to think of eBay as a marketing company rather than the liquidation/ collectibles marketplace it is. (see comment above)
Alibaba is the only competitor that can play the PR game better than eBay. Today I reported on Alibaba’s take on today’s rumors. Alibaba’s Vice President of International Marketing said, “The real source of Ebay’s woes in Asia is its inability to understand local market conditions in this part of the world.” He went on to say that it is inevitable that eBay will withdraw from China.
eBay would not comment beyond saying, “As you know, we are constantly evaluating our businesses to ensure we are operating as effectively as possible given local market dynamics and the needs of our local communities.”
While eBay defeat in China is not certain, there are many challenges. I had written about eBay’s global growing pains in June, particularly some of the challenges of having integrated eBay Eachnet into the eBay platform. The head of eBay Marketplaces John Donahoe said the worst violations on eBay come from members who register in one country, then sell on an eBay site in another country. Donahoe said that in China, eBay has shut down registration for members without a manual verification. And sellers have been complaining of spam coming from Chinese members who offer to sell eBay PowerSellers counterfeit items to resell on eBay.com. China may be more than eBay had bargained for.
This is news. The startup that ate its market share didn’t succeed only because of the free alternative. Most chinese web users prefer to use chinese web services whether or not they are good alternatives. Its just something that will take some time to change and for it to happen, China has to open its doors to more outside competitors.
I agree with Anshul that the local competition greatly out weighs foriegn goods, in many sectors.
Hey,
Some guys here are just naive, don’t always say sth like guanxi or corruption, you lose is because you don’t understand the market
If you think the Chinese company succeed is because they have relation with government, then there are still many foreign companies(many from US) doing well in China. Don’t blame other things, you need to think of yourself.
I admit that there is still government control of the market, but it’s the same in US, when some Chinese companies want to buy US companies, they get much pressure from US government. This is same all over the world.
The chinese market is all about free stuff. The more free it is, the better. Better off not going there for business. If they want good stuff they will have to go to the american or european websites to get it now. Too bad for them. I guess they dont mind sticking to fake stuff.
This is the first bit of good news for eBay sellers that are angry with eBays high prices.
http://www.sellerx.com
This post seems to bring out all the cry babies. I wonder what makes them so convinced that a firm as awful as eBay has the birthright to dominate every market it enters. Well, the unthinkable news is if you can’t make it in China, it’s because you’re not good enough. Even Walmart loses to Carrefour, which is French btw.
Sohu is reporting that eBay Inc will acquire Tencent Holdings (0700.HK) which operates the QQ Instant Messenger service, China’s #1 instant messenging program. The report says that they are in a fifth round of negotiations.
Read more
GrandCentral.com dissapointed me. They don’t support firefox very much. I can’t import contacts or even upload a file to them. Big black text stating: This feature only supported by Internet Explorer. Very lame.
Ebay China said they don’t have plan to leave Chinese market.
Funny, when western companies lose out in foreign nations, they accuse those nations of closing their market. Did you guys even read the article? It said that Ebay lost its market share to a Chinese private company, Taobao. It is time for you to wake up.
Talking about corruption in China while the phedopiles and corruptors are lurking in your own Congress is a hypocracy.
Yes, eBay, move it on over. Get to work on eBay USA.
Many Chinese jewelry sellers are listing simulants as natural, and base metals as karat gold. US sellers can not compete when Chinese sellers misrepresent their items. On top of that US sellers pay fees. Many Chinese sellers do not. No way to compete when the tables are all turned against you.
Ebay/Eachnet responses to the market too slow. Some ebeyer told me that it take them 8 months to get a decidion approved from headquarter. They didn’t understand Chinese market is changing every minute.
Woudn’t have anything to do with the fact that China regularly DNS poisoned ebay’s website and redirected it to taobao, and at other times reduced the allowed bandwidth to ebays site making it unusable. Same things they did to google before they agreed to censor everything.
If you want to play in China, you have to play dirty otherwise you’ll always be on an uneven playing field.
HULLO
Life in developing world is totally different from that in developed
world mostly in addressing afflicting points in one of the nations
community.
The 10 years experience in caring for the orphans in a developing
world, I have gone through a lot of tests /struggles without a funding
person except the only 30 acres of land that has been the main and only
funding source sustaining these kids who are beyond 150 in number.
We use to plant maize, cassava, rice, sweet potato, yams, beans and
groundnuts.
We sell part and survive on the balance as the sold part is for books,
simple clothing and beddings for the kids,(that’s the life of Ugandan
child).
Many disasters have befallen on us while the government has done very
little to address them to the maximum which among others include, wars,
floods, and the
total poverty on the increasing number of community
orphan child caused by different disasters.
Orphans in the villages of the developing world can make everyone to
shed tears including the administration that’s why in Africa many fathers
do a lot evil accts to the people they take care of (i.e. sacrificing
e.t.c)
GEnerally it needs to develop everything GOD blessed us with like land,garden and others to make us tsand for the future and be helpfull to the whole world and ensure that the big and free land which developing world have in plenty, fully provides both funds and
foods for survival.
And as my topic is, the developing world orphans are internationally
forgotten with no one caring and for the few who cares they want to put
us together at the same level
with this who is in developed world. The
center reached to 210 children/ orphaned people who have joined this
year and we have to maneuver to ensure that they’re not kicked out to
street life. Due to the problems and difficulty in caring for the orphan
child that includes a lot emphasis in many areas OF LIVING. For us we think the
only investment in our OWN
firm which may yield a lot in both food for survival and funds for other necessities but still.
We are
looking for solution / advise to enable us achieve our laid strategies of
caring for orphans since the situation at the center
needs attention and as Uganda position in development needs total
effort to sustain such centers.
Can you advise Banunule orphanage administration on the way of taking
the orphans a step further? And what is your a
dvice?
Thanks
Jonathan Bruce Muwanguzi
Center Administrator
phone+256779136589
+256712070924
+256755341950
fax+256412251138
P.O.BOX 71111
Kampala.Uganda.
email jnbanunule@yahoo.com
pysical contact:
we are located at
Nakitokolo Village 30 miles along Hoima road
Namyumba sub county