A case study of how TaoBao succeeded in ousting eBay from the Chinese market.
Written in 2009; 998 words; 2 sources; APA; $ 35.95
Paper Summary:
This paper examines how eBay entered the Chinese corporate-to-corporate (C2C) marketplace in 1999 through its buyout of local firm Eachnet, giving eBay a distinct first mover advantage in the Chinese marketplace. The paper also discusses how eBay's advantage, however, was short-lived, as it faced stiff competition from and was eventually superseded by the Alibaba.com's TaoBao C2C platform.
From the Paper:
"Secondly, TaoBao used Price as another tactic to penetrate and erode Ebay's customer base, which it continues to practice successfully. It even offered free listing of items as a means of acquiring a significant customer base. Ebay's response to the new pricing strategy of TaoBao was slow, and each passing day cost them a significant churn in their customer base. While Ebay had deep pockets to absorb any cut-throat price drops to win customers back, TaoBao also had the recent backing of Yahoo for promoting their offering with special prices. It is evident that Chinese C2C users and vendors and extremely price sensitive and will not hesitate to switch platforms. "
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