How eBay has found a way to Secret in China

Illustration by Topos Graphics

By Bruce Einhorn

There has always been a certain way to executives to cringe from eBay (EBAY) of online market: ask them on China. In 2003, eBay has paid $ 150 million to acquire eachnet, e-commerce site top time as China. Director General Meg Whitman has invested $ 100 million more in the operation, but a combination of management errors - do not give enough power for managers of, for example - and a tough competition from local rival Alibaba group paralysed the company. In 2006, eBay has abandoned and withdrawn eBay EachNet joint-venture with Tom Online. Alibaba group, which unlike eBay does charge commissions, never lost his head. "It is very difficult to compete with free," says Jay Lee, eBay senior Vice President and General Manager for Asia Pacific.

While eBay seeks to challenge Alibaba group anymore, it is not a Plan B for China: connecting exporters and Chinese entrepreneurs eBay consumers elsewhere. The strategy is centred on such vendors as Fengyan Tang, 35, who goes by the English name of Maggie. Four years ago, Tang decided to start his own business dress. She found an ideal way to sell his $50 cocktail to eBay and rockabilly swing dresses and made sales of $700,000 last year. Although eBay since a minimal presence in China, is not the Tang spirit, she continues worldwide customers. To reach them, the most logical eBay. "This is the most famous," she said.

Exporters such as Tang, eBay has a company of China again. Transactions of China and Hong Kong on eBay and its PayPal unit amounted to $ 4 billion in 2010, making China market fifth of the company behind the United States, Germany, Great Britain and Korea from the South. "We learned many things," said Lee. "China is very important, but we need a different way to approach the market."

To achieve this, eBay sought segments of the Chinese market e-commerce not dominated by the pattern of the Alibaba group, Jack Ma and the Alibaba group. Alibaba group is dominant in China, but have little consumers to reach out of the country. Aliexpress, a website connecting small and medium-sized enterprises of importers and exporters in the world, do much for consumers. EBay saw an opening and has today 150 officers of catering to Chinese vendors. Last year, he launched a service with China Post and the Postal Service of United States, to provide a means for foreign buyers track their purchases of China and allow vendors on the continent to offer free shipping. The model of cross - border "is an opportunity that plays to our strength, which is the export business, explains Lee." "" We connect buyers and sellers - that is what we do. ?

EBay is one of the many foreign net companies face a challenge from China. Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO), Amazon.com (AMZN), Myspace (NWS) and the AOL (AOL) stumbled, partly because Chinese officials are determined to censor Internet and are wary of the role that foreigners might play in the politically sensitive environment. (The censors have banned YouTube and Twitter, for example, creating local opportunities for copiers) Slow US companies did not also adapted to the needs of the rapidly changing Chinese market, said Mark Natkin, Managing Director of Marbridge Consulting Beijing. Companies foreign "are a distinct disadvantage," said. "It y number of case studies on which draw, and yet, there is a certain almost-hubris" by foreigners.

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