ebay's War: self-defeating Global integration

Now in the Chinese market has been bad to the sound of ebay, but the company in 2003 has accounted for nearly 80% of China's electricity business, set up from the list of goods to collect the transaction commission of the complete charging business model. The Consumer-to-consumer platform, which was founded in 1999, has defeated the company of new millennium, nets and other peers, in 2003, and won the second ebay 150 million dollar investment (the previous year, ebay has invested 30 million U.S. dollars), as the international electric business giant's China wholly-owned subsidiary.

Eric Iresearch's statistics show that 2003 Taobao market share weight 7.8%, while ebay ebay is 72.4%, the gap is obvious.

But in 2004, ebay's negligence made the electrical business pattern in a year reversed, the achievements of Taobao. In addition to ebay fees, Taobao free of these familiar stories, 21st century Business Review analysis of the reasons for the reversal of the year:

Self-Defeating Global integration

ebay promoted its global integration in 2004 when 5.5 million Chinese users were able to trade online with 105 million users in 27 countries and regions of ebay. It is said that international transactions can bring much higher profits than domestic transactions. But the most direct change in global integration is that ebay's previous system was completely discarded and the server relocated to the United States, with the system collapsing.

Buyers found that they could not open the new ebay system page, sellers often can not log in to the background shop management system, bad experience provoked to scold a sound. And even more frightening is that such a situation has lasted for at least a half year to make a significant improvement, and ebay's global CEO Meg Whitman went to China to direct the remedial work.

Large merchants were easy to stabilize at first, but after the buyer had voted with their feet, everything quickly slipped out of control. Old ebay's memories show that ebay's traffic slipped to only one-third in the past few months. Ching said his impact as ebay's top seller was not too obvious, but it was clear that the volume of turnover had slipped month by month, and that for more small and medium sellers, the loss of buyers made it impossible for them to sit back.

They went to another long-awaited Taobao. Like siphon effect, the balance of victory and defeat began to reverse.

An old ebay man told a piece of secrets. According to its later in the U.S. headquarters in ebay, Ali plan Taobao, have Ma's will, also from son advice and persuasion. It was in the victory of the Japanese native war that keen son found that the ebay Global system and East Asian market localization There is a matching problem, when eBay2002 began to invest in ebay, he is the pre-auction ebay will launch a global integration and will inevitably encounter setbacks, China Consumer-to-consumer market will have a short opportunity to overtake.

Market Promotion

Ebay has been aware of the threat of Taobao, in the marketing aspect of its suffocating type of containment. At that time, ebay waving checks to sign almost all the quality of online advertising resources, but also to the exclusive exclusivity of the terms of cooperation, do not want to give Taobao leave any chance. The old man who had been through the war said that even when ebay nearly 40% of the advertising revenue of NetEase portal.

Ali is a strong market public relations system to show an extraordinary sense of smell and combat effectiveness. When portals were blocked, they turned to small-and medium-sized web-site alliances, outdoor ads and television commercials, and tried to embed ads in the popular surreal, "No thieves". In PR communication, Taobao is to make ebay Thorn, Thorn, they continue to spread in the SKU (commodity number), growth rate and other indicators to catch up with ebay information. Former Ali who had been in the public relations battle, recalls that as long as ebay held a major conference, Taobao PR staff will follow, the Division of labor to take care of the media, to persuade them in the report on ebay, the synchronization of the growth of Taobao, so that the public firmly remember its as the ebay's strongest opponents posture.

"ebay's launch actually played an education, training market effectiveness, I'm sorry, the last dividend is from Taobao pick." Former Ali PR people said.

At the end of 2005, the tide of war was clear. Eric figures show that Taobao's share of the year has been reversed to occupy 58.6%, while ebay only 36.4%.