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
1999
2000
2001
2002
2003
2004
2006
2008

3. EachNet Issues Strategic 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 1995 founded by an engineer named Pierre Omidyar 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 Organization Changes in eBay China
EachNet’s leaders
platform
eBay Asia.
centralized to eBay headquarters in U.S
listing categorization
servers
Website maintenance
interface styles
technologies
pricing

10. Masayoshi Son founder&CEO
Taobao
searching for treasures
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
Softbank Capital
Masayoshi Son founder&CEO
Taobao.com C2C
headed by Tongyu Sun
invest $12 million in 2003
defeated eBay

12. http://s. taobao. com/search

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
eBay China
Taobao
Wholly owned subsidiary of eBay
Chinese C2C website
Resembles its American parent in many ways
the popular Chinese martial art subculture.
Six core values
shop servant

16. Difference operation styles
eBay
Taobao
Communication
Hierarchy and indirect
Direct communications
Employees
Highly educated&experience
Professional elite
Highly motivated college graduates
Consider each other as sisters and brothers
Executives
western educated
Hired from all over the world
Local college graduates
Mostly promoted inside the co.

17. Difference operation styles
eBay
Taobao
Operational strategy
Integrated China operation into eBay global platform
Implemented corporate policies and procedures
Improvised and experienced based
adapted quickly based on market and technology environment
Decision making
Centralized and analytical
Decentralized and semi-analytical
Customers
Treated as external entities
Treated as part of the company
Attitude toward media
Negative
Avoid if possible
Positive
Embrace and take advantage of

18. Competing for Customers
eBay China
Taobao
invest heavily in its marketing campaigns in China
switched to the “ants’ way.”
sign exclusive contracts with almost all the major Chinese websites.
posted thousands of messages to bulletin board services (BBS)
emphasis on quality service
launched with an entirely no-fee model
used the category structure set by eBay’s global platform.
designed its categories in accordance with the typical structure of a Chinese department store
foster a sense of community on its website,
setting up online forums
encourage interaction b/w sellers&buyers.
integrated an instant messaging service
Less informal and friendly
More informal and friendly
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
eBay
nearly all the major websites in China
Global Resources
Tom.com (Hong Kong based)
Taobao
Sohu portal websites
MSN China (Microsoft's portal)

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
Answer: B

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

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

28. Cited Page http://www.ebay.cn http://www.eachnet.com

29. Thank You