Tao Bao EBay China

1. Tao Bao EBay China By Ying Wang

2. TaoBao vs.EBay China EachNet EBay China Tao Bao Launch www.ebay.cn % 90 EBay acquired EachNet Tao Bao founded by Chinese entrepreneurs Bo Shao and Haiyin Tan 60 EBay China 30 eachnet.com 2003 1999 2004 2002 2006 2000 2001 2008

3. EachNetIssuesStrategic Decisions reluctance to complete transactions online 1999 • trading booths in each city, bust costly Lack of trust • create a cash-on-delivery system lack of an efficient delivery system • partner with the four largest banks in China Process payments offered escrow service &PayPal-like service Difficultly raise capital 2000 charge listing fees to sellers online fraud 2001 a user rating system conduct investigations & punish cheaters Real Name Program for user registration.

4. eBay founded by an engineer named Pierre Omidyar 1995 1998 eBay went public on NASDAQ 1999 Launch websites in Germany, U.K, Australia 2000 Launch websites in Japan, Canada, France, Taiwan and Austria 2001 expanded to 17 markets &had spent more than $1.6 billion on acquisitions 2002 Exited Japan & acquired EachNet 2003 James (Xigui) Zheng joined EachNet as its CFO. 2006 Established a new joint venture with TOM to operate C2C business 2007 Rank the 3rd in the C2C online market EachNet was entirely cut off from eBay’s global platform

5. eBay’s Global Strategy and OrganizationChanges in eBay China platform EachNet’s leaders eBay Asia. centralized to eBay headquarters in U.S servers listing categorization Website maintenance interface styles technologies pricing http://www.ebay.cn/ http://www.eachnet.com/

10. searching for treasures Taobao • A local college English teacher • no knowledge of computers • Step down on May 10, 2013 Jack Ma Founder & CEO the leading B2B website in China. Alibaba.com B2B in 1999 Taobao.com C2C headed by Tongyu Sun Softbank Capital Masayoshi Son founder&CEO invest $12 million in 2003 defeated eBay http://www.taobao.com/index_global.php

12. http://s.taobao.com/search?q=shoes&keyword=&commend=all&ssid=s5-e&search_type=item&atype=&tracelog=&sourceId=tb.index&rt=1369084842133&source=haiwaigou&pid=mm_14507416_2297358_8935934&unid=http://s.taobao.com/search?q=shoes&keyword=&commend=all&ssid=s5-e&search_type=item&atype=&tracelog=&sourceId=tb.index&rt=1369084842133&source=haiwaigou&pid=mm_14507416_2297358_8935934&unid=

13. Why Taobao took over eBay China? • Taobao has an embedded competitive advantage to transform a better understanding of the national culture into an organizational culture. • Organizational culture has significant impact on the competitive strategies and market performance.

14. National culture in China • Business deals had often been negotiated face-to-face • Guaranteed by individual reputations, • Financial transactions had relied on cash based systems • No credit infrastructure at the individual level

15. Different Organizational Culture

16. Difference operation styles

17. Difference operation styles

18. Competing for Customers eBay China’s users Taobao

19. Competing in Payment Services eBay China similar An Fu Tong PayPal • Confused An Fu Tong &PayPal • Transaction system had erred growing slowly Taobao offers AliPay • escrow services • delivery of transacted merchandise • customized services at discounted prices to users of AliPay rapidly being adopted

20. Competing for Partnerships

21. The Problem of Counterfeit Merchandise • the market was flooded with counterfeit merchandise (clothing and accessories). • Few buyers complained • 70% of C2C sales were of counterfeits in clothing and accessories. • In China, no online service providers are responsible for damages due to counterfeiting. • raised a serious dilemma for eBay corporate • In 2007, LVMH sued Taobao, lead to an agreement. • in 2008, LVMH sued eBay in a Paris court, it won the case.

22. Why did eBay China’s performance continue to decline? • eBay’s global decision-making processes severely dragged down the speed of decision making in its China operation. • Centralization harmed eBay China’s technical performance. • Frequently change eBay China’s leadership. (3 CEOs w/n 2 Yrs) • Relies on professional market research reports and data • Treated customers as external entities • Negative attitude toward media

23. Solutions for multinational firms • Localizing top management team • Fast decision making with decentralized power structure • Adopt a positive attitude toward media and social networking • Partnership with strong locals • Grow market first and profit from it later

24. Is Taobao a Profitable Company? • constant pressure to generate revenue • promise to offer all services free for three more years • In May 2006, offered a fee-based service & suspended a month later. • Alibaba.com Inc. support three more years’ fully free services on Taobao.com

25. Questions • Which one is the decision making process for eBay? A. Decentralization B. Centralization

26. Questions 2. What is the payment system of Tao bao? • Paypal • An Fu Tong • Alipay • Aliwangwang

27. Questions 3. What is the % on sales of counterfeits in clothing and accessories. A. 50% B. 60% C. 70% D. 80%

28. Cited Page • http://www.ebay.cn • http://www.eachnet.com • http://www.baidu.com/s?ie=utf-8&bs=Tongyu+Sun&f=3&rsv_bp=1&rsv_spt=3&wd=%E5%AD%99%E5%BD%A4%E5%AE%87&rsv_sug3=2&rsv_sug=0&rsv_sug1=2&rsv_sug4=533&oq=SunTongyu+&rsp=0&rsv_sug2=1&rsv_sug5=0&inputT=2849 • http://www.baidu.com/s?ie=utf-8&bs=%E5%AD%99%E5%BD%A4%E5%AE%87&f=3&rsv_bp=1&rsv_spt=3&wd=%E9%A9%AC%E4%BA%91&rsv_sug3=5&rsv_sug=0&rsv_sug1=2&rsv_sug4=1122&oq=mayun&rsp=0&rsv_sug2=1&rsv_sug5=0&inputT=3644 • http://tech.sina.com.cn/i/2013-05-10/01188323836.shtml • http://www.omidyar.com/team/pierre-omidyar • http://www.baidu.com/s?ie=utf-8&bs=Tongyu+Sun&f=3&rsv_bp=1&rsv_spt=3&wd=%E5%AD%99%E5%BD%A4%E5%AE%87&rsv_sug3=2&rsv_sug=0&rsv_sug1=2&rsv_sug4=533&oq=SunTongyu+&rsp=0&rsv_sug2=1&rsv_sug5=0&inputT=2849

29. Thank You