Ebay in Asia

eBay came to China in 2003 through its acquisition of Eachnet. Many analysts thought that eBay's China operation would be as successful as in the United States. When eBay failed in Japan, it should have learned from its mistakes in applying its American model to an Asian country. Their competitor Eachnet’s management team had staked out a commanding lead in the online auction sector, controlling nearly 80% of the market. They had strong international and domestic experience and were close to their customers.

eBay made many mistakes just by looking at the four Ps (product, place, promotion, and pricing). Instead of taking the time to survey the market and find out what was most important to their customers they took what worked in the American market and tried to shove it down the Chinese throats. A perfect example would be their Paypal option. The average customer in China wants a full proof payment method. eBay’s competitors used a plan where payment was not given until the product was in the buyers hands. eBay eventually instituted this plan but the timing was off and it had little effect on their profits. The Chinese legal system takes too long to support buyers or sellers that get ripped off.

Another example is that China customers want a competent customer service which eBay did not give. Many consumers dislike eBay because of bad service and because it did not focus on building up trust with the consumer.

eBay initially charged listing fees, as it does in the United States and Europe. Their competitors offered free listings. Many critics felt that high prices are the main reason for eBay's failure. These critics believe that Chinese consumers will always choose the free or low cost option unless a product is tangible.

Chinese consumers like to make every purchase personnel to build trust. eBay however did not allow contact between the buyer and seller. The competitors provided text messaging between the two parties. eBay once again added this option but was too late to effect the company in a positive way.

eBay was reluctant to allow their China operations to make decisions at critical junctures which added to their demise. The executives at headquarters did not