Why does eBay have problems in its Asian markets?
TUI University (formerly Touro University International)
Anthony J. Rayner
BUS 401- International Business
Module 1- Introduction to International Business; Global Marketing
Case Assignment
Dr. Fadia Alkhalil (Core Professor)
Dr. Wendy Wang (Coordinating Professor)
October 20, 2008
Why does eBay have problems in its Asian markets?
EBay decided to enter Asian auction online markets to increase shareholders’ wealth, earn additional revenues by entering new markets and gaining new market shares. It seems that eBay forgot the basic international marketing concepts like, entry decisions, entry modes, Four Ps’, standardization, and adaptation. I will cover these areas of discussion and identify eBay’s basic international market concept problems.
EBay had several reasons why it had major problems. The first Asian market failure was when eBay became a late entry into the Japanese market six months after Yahoo. This gives Yahoo a massive head start to establish itself in the Asian market early. EBay also tried to use standardization product marketing mix on the Japanese consumers, rather than using an adaptation to meet Japanese consumer’s needs. EBay failed to research and understand Japanese culture (Belson et al., 2001). They tried to target the younger market, and influence them to pay by credit card, but did not understand most Japanese prefer to pay “cash on delivery” or by bank deposit (“The death of,” n.d.). Also, eBay was imposing a 5% commission charge. On the contrary, Yahoo charges nothing at all (Belson et al., 2001). After all the mistakes EBay made in Japan market, it should learn from it before entry in the China market.
Secondly, EBay came to China thr ...