ebay in China

It seems as though eBay is ready for a rematch with Taobao. It may not be the battle we witnessed in 2006, but eBay is definitely interested in re-entering the Asian market. Fingers crossed they have better luck than they did last time and that eBay’s team realized that they previously approached the Chinese market incorrectly. This time around, eBay is looking to strengthen connections with sellers, hoping to increase sales from Greater China by 30-40%.

An excerpt from Helen Wang’s The Chinese Dream recaps the previous battle between eBay and Taobao, ending in 2006. eBay made a couple of big foreign faux-pas, and goofed by spending money marketing via Internet, rather than TV and through cell phones. Jack Ma, the young and brilliant founder of Taobao was much more accustomed to the Chinese business model, and knew how small business owners could be reached. Preventing eBay from creeping into the Chinese market, he defensively started Taobao, “digging for treasure,” and made it a user-friendly and free site. As we know, competing with free is very hard to compete. eBay felt threatened, and spent USD 180 million dollars on Chinese company Eachnet, hoping it would be an easier way to the competition. However, Eachnet wasn’t the in they needed, and Taobao managed to wedge the company out. It’s been a couple of years now, and eBay has absolutely been rethinking its game plan.

It’s in the books – foreign companies have not been overly successful with China, like we’ve seen with Google, and Yahoo, because of cultural differences and the Chinese determined to be leaders in their own country.  Maybe eBay’s goal to simply attract sellers from China rather than becoming a major leader will allow the company to last longer.