eBay is an international e-commerce company that supports business-customer and customer-customer sales through its website. The company began its operations in the Chinese market in 2002 in its acquisition of EachNet (Li et al., 2008). While launching its website in China, the organization had the expectation that the business would be a success. However, the organization did not consider the cultural differences and the Chinese market's specificity and therefore applied the business model it uses in other parts of the world. One of the cultural considerations that eBay did not make was the increased preference for sellers and buyers in the Chinese market to deal with fixed prices instead of auctioning (Greeven et al., 2012). eBay was utilized by consumers in other markets to purchase products directly from other consumers. However, in the Chinese market, consumers did not utilize customer-to-customer business for the purchase of used products but were instead dependent on small businesses to suggest cheap products to consumers.
Another consideration that eBay did not make was the real need that Chinese consumers possess to have the opinions of others. Chinese customers are dependent on the opinions and feedback of other customers to gain information concerning the product they want to purchase (Li et al., 2008). As an American firm, eBay did not provide Chinese consumers with the opportunity to section through which they could verify this feedback. To avoid making the same mistakes as eBay did in the Chinese market, other companies should focus on having a better understanding of the foreign culture that they are engaging in. This understanding should include an assessment of consumer preferences, customer beliefs, and the successful practices being used by competitors within the market. Integration within foreign markets is essential to ensuring that the target market is attracted to the products and services being offered.
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References
Greeven, M., Yang, S., Yue, T., van Heck, E., & Krug, B. (2012). How Taobao bested eBay in China. Financial Times , 12 . https://www.ft.com/content/52670084-6c2c-11e1-b00f-00144feab49a
Li, D., Li, J., & Lin, Z. (2008). Online consumer-to-consumer market in China–a comparative study of Taobao and eBay. Electronic Commerce Research and Applications , 7 (1), 55-67.
