Ebay: Expanding Into Asia Essay

2107 Words Mar 2nd, 2008 9 Pages
eBay: Expanding into Asia

On September 3, 1995, Pierre Omidyar founded eBay in San Jose, California. Pierre and his wife, Pamela Wesley, had a vision that included creating a marketplace online where people could share the same interests. This vision also included a format that could create a fair and open meeting ground where prices were determined purely by the market. The site was based on five main values: people are basically good; everyone has something to contribute; an honest, open environment can bring out the best in people; everyone deserves recognition and respect as a unique individual; and you should treat others the way you wanted to be treated. The online auction website did not initially charge user fees, but as
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These channels are as follows: marketplaces (eBay), payments (PayPal), and communications (Skype). One weakness about this approach should be noted; that is, Skype has not been very successful and has been partly blamed for the decline of eBay.
There are two major issues which may have a major effect on the success of eBay in the future. The first is that there are very low entry barriers to the online marketplace. Almost anyone with a computer has the capability of starting an online company. This results in an almost limitless number of competitors. The second major issue is eBay's inability to penetrate the Asia Pacific market. In order to remain competitive eBay must capitalize on this rapidly growing market. There are many companies competing for market share in the online auction market. Amazon, and Yahoo! are among the largest of these companies. Amazon is more of a local threat in the United States because the items it sells are linked to brick-and-mortar stores. Yahoo! is a tremendous global threat, especially in Asian markets. Yahoo! competes with all aspects of eBay's business with Yahoo! Shopping, Yahoo! Auctions, Yahoo! Autos, etc. They also have partnerships with the largest online auction sites in Asian markets. In 2006, Yahoo! purchased a 9% stake in GMarket which boasts 17.2 million unique users in Korea. An even more important partnership is with Taobao which controls over 70% of the Chinese online auction

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