Why Does Ebay Have Problems in Asian Markets

Why does Ebay have problems in Asian Markets? This is the question to be answered in the first Case assignment of Business 401. In order to answer this question there must be discussion about Global marketing concepts, such as product, place, promotion, and pricing (the 4 p’s), method of entry, and entry decision. Then it is important to apply those concepts to the Asian Market. In the pages that follow I will discuss the marketing decisions of Ebay in their mission to expand into Asian markets. As well as, possible solutions to some of the decisions that didn’t work out so well.

Entering a foreign market with an unfamiliar culture is not for the weak, but the obstacles did not deter Ebay from attempting to jump into the Asia-Pacific region. The online auction site in South Korea, Internet Auction, is an eBay subsidiary. However, in Japan, Yahoo! beat eBay to the punch in introducing the country to online auctions. German media company Bertelsmann sells books and music to online Chinese consumers. And Amazon owns a majority share of Joyo.com Ltd., a British Virgin Islands-based firm with an established online retail site in China.

A significant component of a country’s e-readiness score is its ability to support a retail ecommerce environment. This is calculated by the level of internet connectivity and technology infrastructure in a particular market. Share of retail commerce conducted on the internet, logistics support and online payment systems are also ingredients of the equation, as well as the legal and policy atmosphere and the availability of ecommerce technical support and tools.

According to the Economist Intelligence Unit (EIU) ranking of e-readiness, Japan is the number 2 internet market in the world behind the United States and South Korea is number 3. In sheer volume of users, China is the number 2 market in the world behind the United States. That is staggering because there is less than 10 percent of homes in China have internet connectivity. When added up,it is obvious that Asian markets are very tempting, either because of their sheer size or because the communications and financial infrastructures in place create supreme electronic marketplaces.

So where did Ebay go wrong? In South Korea, Internet Auction