Ebay seeks positioning in Chinese retail market

ebay, which has been the country's typical retreat from China, is now making a comeback, looking for positioning in the Chinese retail market.

ebay, who is familiar with ebay's China, said it had signed a five-year exclusivity agreement when it handed over its ebay network to Tom at the end of 2006, restricting ebay from engaging in business with ebay in China, which is why ebay has no more trading platform in the mainland, Chinese sellers on its foreign trade platform have so far been required to register and trade at the Hong Kong station.

But ebay has no intention of abandoning China's e-commerce market, especially as it has become one of the world's fastest-growing online trading markets in recent years, particularly because of the rapid expansion of China's electric business. As early as last year, ebay insiders pointed out to Tencent that ebay was looking for ways to return to the mainland's market.

As the five-year binding agreement expires at the beginning of this year, ebay will finally be able to move on, and its concrete strategy for a comeback would soon be revealed. Tencent Science and technology learned that ebay and the headquarters in Shenzhen, the company's business to show the network negotiations have been basically settled, the information is currently known to show that ebay or will invest in the show network, the two sides will establish capital and business depth of cooperation. Details of the detailed cooperation will be officially announced 12th this month.

People familiar with the matter said that a team responsible for developing market development at ebay headquarters was specifically responsible for this, and that the direction of ebay's investment in China, its investment objectives, was led by the team, and the Chinese region was cooperating. The team may have begun to contact China's electric Business company a year ago, and decided to work with the show network six months ago, just to make some detailed consultations.

Why does ebay want to go back to the mainland market with the help of catwalk? The simple explanation is that it is hard to have the hope of winning in the brutal competition now to build a business platform from scratch. The deeper reason is that ebay does not want to repeat the same story.

The global electric giant has a disastrous business history in China. A few years ago, because of the lack of understanding of the localization market, copying the American model, it was in the fight against the early Taobao passive, and finally gave up the idea of separate development of China's domestic market. But now, ebay has clearly summed up the experience of past failures, that is, if they do not understand, let the people who understand to do, rather than their own direct business, as a reference to sun justice and Alibaba model, direct investment in a Chinese power company.

But not everyone is bullish on ebay's collaboration with the catwalk. Insiders pointed out that on the one hand, ebay headquarters still lack of understanding of China's domestic market, on the other hand, the domestic medium-sized electric dealers have more or less problems, take the show network platform itself is not healthy outside has been a doubt.

Ebay China: Five years of withdrawal from local business through the joint venture curve return

EBay actually came earlier than it did in 2004 by acquiring an excellent entry into the Chinese market.

In March 2002, ebay officially entered the Chinese market by acquiring 33% per cent of ebay, the country's largest electricity dealer, and later acquired 67% of ebay's shares in June 2003. Ebay has also started to become a wholly owned subsidiary of ebay in China.

But as the first Internet company to enter China, EBay has made too many mistakes in its operations in China, and any one of them is fatal.

ebay's founder, Shao Yipo, has been elevated by ebay, and ebay China has been run by leaders from Germany, the US, Taiwan and Hong Kong, who have no knowledge of the Chinese market, an ebay employee said in an open letter. The employee also said Whitman, the CEO of ebay, was completely ignorant of China, and no one around her dared to tell her the truth.

These mistakes, coupled with Alibaba's rapid offensive, ebay ebay was quickly overtaken by Taobao. In 2003, ebay bought ebay wholly, its consumer-to-consumer China market share of nearly 80%. But only two years later, in early 2005, ebay's market share had slipped to 24%, while Taobao rose to 57%.

The change may also be one reason why ebay is focusing on cross-border deals as it moves its domestic consumer-to-consumer business to Tom's online operations. In Cross-border business, combined with its payment tools Paypal,ebay has a unique advantage in Cross-border business.

ebay sellers in China rose 34% per cent year-on-year, far higher than in other parts of Asia, according to ebay's data released last August.

But ebay is clearly not willing to give up the Chinese market but to do cross-border business. In 2009, ebay acquired a stake of at least 67% per cent of South Korea's biggest electric company, Gmarket, and foreign analysts said that after the acquisition of Gmarket, ebay would be focusing on gmarket to develop a business strategy for the Asian market, especially in China.

That is true. In April 2010, the founder of ebay's joint gmarket created a company called Giosis, ebay, which accounts for 49% of shares. In September 2011, Giosis officially released the website of Qoo10 (fun Skynet) and introduced the site to China this year.

At the end of October this year, the fun of Skynet official and China's business website Macaulay, Mai Lin to become interested in Skynet business.

In addition to the curve into the Chinese market, this May, just after the end of cooperation with Tom, ebay in Shenzhen to set up a new company billion management (Shanghai) Co., Ltd. Shenzhen branch. Business registration data show that the company's legal representative is John Patrick Courtney, who is the ebay Asia-Pacific operations and customer service director. For now, ebay may be taking the company as its core to restart its domestic electricity business.

Domestic electric Dealer competition intense ebay opportunity geometry?

It is not easy for ebay to start over in China.

The competition form of domestic electric business platform is becoming clearer now. That year to beat off the ebay Taobao and the cat has occupied half, Jingdong, Suning easy to buy and Tencent followed, followed by Amazon China, Bowser, Dangdang and so on. Competition among Giants will continue, but the barriers to competition are getting higher.

In addition to these already have a larger scale of direct competition, the electricity business industry has more and more people. For example, banks and telecom operators have also begun to build their own electric business platform, recently CCTV on the mall also repackaged debut. This means that ebay faces the pressure of the local electric-business giants, while also coping with the challenges of the small and medium power companies.

In order to compete for market share, the domestic electric company has already regarded the price war as the conventional weapon, the electric Business company often has to sacrifice the profit to exchange the scale. In such a competitive market, ebay has no obvious advantage, even if it is willing to price war regardless of cost, the market share is very limited.

Of course, ebay can also return to the domestic electricity market in the form of investing in shares. But it's very dependent on the capabilities of ebay's partners. This requires ebay to be able to choose the right partner, but the real power of the domestic electric trader is willing to let ebay hitch a ride.

But the key to ebay's success or failure is its ability to achieve truly effective localization management. Ebay rivals Amazon's lesson in China is also well worth learning. This is the original fail of ebay, if this problem can not be solved, then all is empty talk.