Monday, September 13, 2010

How Ebay failed in China - Helen Wang

HANGZHOU, CHINA - MAY 10:   Ma Yun (L), chairm...
Jack Ma of Alibaba
In the slipstream of the most recent Yahoo-Alibaba brawl Helen Wang recalls the long-standing tradition of failure Yahoo's ecommerce site Ebay had in China. From an excerpt of her upcoming book "The Chinese Dream" in Forbes.
The struggle started in 2004:
In 2004, I visited Alibaba at its headquarters in Hangzhou. It is located on a campus of three ten-story buildings in the northeastern part of Hangzhou, about a ten-minute taxi drive from West Lake. In the lobby, a flat panel TV was streaming video clips of Jack Ma speaking at various public events where his admirers, most of them in their twenties, were cheering him like a rock star. While visiting Alibaba’s headquarters in Hangzhou, I felt the same “insanely great” energy of entrepreneurship as I felt in Silicon Valley. When I asked a senior manager at Alibaba whether the company was worried that it would be bought by eBay, I was blown away by the answer: “We will buy eBay!”
As we know now, Ebay failed that epic struggle, that is still going on. Helen Wang:
First, eBay failed to recognize that the Chinese market and the business environment are very different from that of the West. EBay sent a German manager to lead the China operation and brought in a chief technology officer from the United States. Neither one spoke Chinese or understood the local market. It was eBay’s biggest mistake. Second, because the top management team didn’t understand the local market, they spent a lot of money doing the wrong things, such as advertising on the Internet in a country where small businesses didn’t use the Internet. The fact that eBay had a strong brand in the United States didn’t mean it would be a strong brand in China. Third, rather than adapt products and services to local customers, eBay stuck to its “global platform,” which again did not fit local customers’ tastes and preferences.
Commercial
Wang_Helen_HiRes_black_MG_1708Image by Fantake via Flickr
Helen Wang
Helen Wang is a speaker at the China Speakers Bureau. When you need her insights at your meeting of conference, do get in touch.
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