How to implement e-business strategy in China. A case study of Taobao and eBay China

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How to implement E-commerce strategies in China?

  • A case study of Taobao and eBay China

By 2002, eBay entered China with its acquisition of the start-up EachNet, holding over 70 percent share (Exhibit 1). But by 2006, Taobao established in 2003 overtook eBay China. Although eBay nominally continued to operate in China, it was no longer a concern of Taobao which held over 80 percent of the market in 2008 (Exhibit 1). Such case compares and contrasts their business strategies to analyze how to beat formidable players in China.

Table 1: the comparison of business strategies between eBay and Taobao

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Source: IMS E-Business Models and Strategies, Jie Huang (2012)

According to Chinese consumer behavior, there are some specifics. Firstly, “free” products are easier to attract the Chinese consumers. Secondly, there are some problems of fraud so that they prefer to directly contact with the seller and obtain more detailed information about products in China. Thirdly, they like to use simple but secure approaches to pay the products.

These explain the reason why Taobao beats eBay in China. Overall, Taobao has a more clear understanding on the Chinese customer behaviors than eBay China, and it implemented “free charge” strategy ...

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