Monday, December 25, 2006

economy - Connections help, but are not a guarantee for success

Soft doctors make stinking wounds, is a saying we have in the Netherlands. That explains why despite a stiff economic growth in China, the smell of decay is never far away. Very few consultants give their clients the advice they need, and if they give it, they are most likely to be ignored.
Shaun Rein belongs to the second category and that is what I like about his piece: he does not mind to potentially piss off a few potential clients.
In Seeking Alpha he explains why the argument brought in by the New York Times (you need political connections) on the cooperation between Ebay and tom.com is the setting the stage of yet another high profile failure.

If connections are the magic pill for doing business in China and is all that left eBay from making money here in the first place, why is TOM Online with all of their backing still a 3rd tier if that portal?

When you are not doing your customers a favor in China, no level of political connections is going to help you.

eBay's problems in China had more to do with a lack of understanding their customers than in not having political connections. The Eachnet team did quite well before eBay screwed it up. If Meg Whitman et. al. had actually taken the time to understand their consumers (and listened to their employees from Eachnet
on the ground in China for that matter), then China would have been a success for them as Jack MaÂ’s Taobao (YHOO) has been.
Great stuff. But it does not fit into the frame work of the Ebay-likes, so will most likely be ignored.

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