Business Case Studies, Leadership Case Study, Tata Group,Ratan Tata

Code : COM0090

Year : 2005

Industry : Internet and e-commerce

Region : China

Teaching Note:Not Available

Structured Assignment :Not Available

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Introduction:China is expected to become the world's biggest e-commerce market by 2015. To tap the growing e-business opportunities, eBay entered China in 2002 by acquiring EachNet, the leading player in Chinese e-commerce market. As China was a completely different market from eBay's other markets in terms of infrastructure, customer behaviour and overall business environment, eBay had to customise its operations and services to suit the Chinese market conditions. It invested heavily in advertising, brand building and expanding the online auction market. For 2005, eBay has earmarked a sum of $100 million for investments in China.

However, eBay is facing tough competition from a Chinese local e-commerce site, taobao.com, which started its operations in 2003 and within a span of two years, has overtaken eBay in terms of transaction volume. Also, in mid-2005, Yahoo has emerged as a big threat by acquiring a stake in the leading Chinese business-to business (b2b) e-commerce site Alibaba.com, which is also Tabao's parent company. Still, eBay plans to take a complete control of the online auction market in China.

As of 2005, China has around 94 million strong Internet user population,which is 31% of all users in Asia (and second largest in the world). The Chinese Internet user population recorded an average growth rate of 318% between 2000 and 2005.