Presentation on theme: "Tao Bao EBay China By Ying Wang. TaoBao vs.EBay China 2006 2003 2002 20012000 2008 Tao Bao EBay China EachNet EBay China Tao Bao eachnet.com EBay acquired."— Presentation transcript:
Tao Bao EBay China By Ying Wang
TaoBao vs.EBay China Tao Bao EBay China EachNet EBay China Tao Bao eachnet.com EBay acquired EachNet Launch 90 % founded by Chinese entrepreneurs Bo Shao and Haiyin Tan
EachNet Issues Strategic Decisions 1999 reluctance to complete transactions online 2000 lack of an efficient delivery system charge listing fees to sellers online fraud Lack of trust trading booths in each city, bust costly create a cash-on-delivery system partner with the four largest banks in China 2001 a user rating system conduct investigations & punish cheaters Real Name Program for user registration. Difficultly raise capital offered escrow service &PayPal-like service Process payments
eBay founded by an engineer named Pierre Omidyar Launch websites in Germany, U.K, Australia eBay went public on NASDAQ 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 Established a new joint venture with TOM to operate C2C business 2007 Rank the 3 rd in the C2C online market EachNet was entirely cut off from eBay’s global platform
eBay’s Global Strategy and Organization Changes in eBay China centralized to eBay headquarters in U.S platform servers EachNet’s leaders Website maintenance pricingtechnologies interface styles listing categorization eBay Asia.
Taobao Jack Ma Founder & CEO Alibaba.com B2B in 1999 A local college English teacher no knowledge of computers Step down on May 10, 2013 invest $12 million in 2003 Taobao.com C2C headed by Tongyu Sun the leading B2B website in China. searching for treasures Softbank Capital Masayoshi Son founder&CEO defeated eBay
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.
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
Different Organizational Culture eBay ChinaTaobao Wholly owned subsidiary of eBayChinese C2C website Resembles its American parent in many ways the popular Chinese martial art subculture. Six core values shop servant
Difference operation styles eBayTaobao CommunicationHierarchy and indirectDirect communications EmployeesHighly 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.
Difference operation styles eBayTaobao 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 CustomersTreated as external entitiesTreated as part of the company Attitude toward media Negative Avoid if possible Positive Embrace and take advantage of
Competing for Customers eBay ChinaTaobao 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 servicelaunched 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 friendlyMore informal and friendly eBay China’s users Taobao
Competing in Payment Services An Fu Tong PayPal AliPay Confused An Fu Tong &PayPal Transaction system had erred similar growing slowly escrow services delivery of transacted merchandise customized services at discounted prices to users of AliPay offers rapidly being adopted eBay China Taobao
Competing for Partnerships Partners eBay nearly all the major websites in China Global Resources Tom.com (Hong Kong based) Taobao Sohu portal websites MSN China (Microsoft's portal)
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.
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
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
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
Questions 1.Which one is the decision making process for eBay? A. Decentralization B. Centralization
Questions 2. What is the payment system of Tao bao? A.Paypal B.An Fu Tong C.Alipay D.Aliwangwang
Questions 3. What is the % on sales of counterfeits in clothing and accessories. A. 50% B. 60% C. 70% D. 80%