Buying Behavior & Market Analysis Essay Example | Topics and Well Written Essays - 1250 words

Buying Behavior & Market Analysis - Essay Example In this case, the company uses the ideal task of the internet of moving information to its benefit. This business model around eBay has gained a lot of success in the local American market. Moreover, the model has been taken to numerous foreign markets gaining a lot of success. Case in point, the model has been successful in the European markets in countries such as Germany, France, and England. However, replicating this success has proved to be a huge challenge for eBay in its Asian markets. In effect, there has been a failure of the model by eBay in Korea and China while its operations in other Asian markets experience slow growth. Therefore, this expose elucidates the factors contributing to eBay’s failure in establishing itself while using the global marketing concepts. The Korean subsidiary of eBay, Internet Auction, dominated the auction market over the internet in South Korea in 2004. In this case, the eBay subsidiary revenues accounted for a third of eBay’s reve nues in the Asian market. However, a Korean upstart called Gmarket overtook Internet Auction in terms of the market share and consequently revenues earnings significantly dropped. It is noteworthy that eBay’s principal rival, Yahoo!, held a 10% stake in the startup. Effectively, by the end of 2006, Metrix pointed out that the 17.2 million unique visitors in Gmarket surpassed the 17.1 million visitors for eBay (Ihlwan, 2006). On the other hand, Eachnet’s--the subsidiary unit of eBay in China--chief executive unexpectedly resigned. According to market analysts and researchers, the reason for the resignation was eBay’s loss of its top position in the Chinese internet auction market. In this case, Alibaba.com’s Tao Bao ranked first while eBay’s Eachnet followed. It is important to note that, the chief rival, Yahoo!, held 40% of Tao Bao’s venture. According to an agency, partly owned by the government, called China Internet Network Information Ce ntre quasi, Tao Bao led the online auction market in China with a 67% share while eBay’s Eachnet held 29% of the market share (Mangalindan, 2006). One factor that eBay never considered was that, the global approach in which online auction firms offered products across nations was practical in instances that competition was limited. In this case then, since eBay controlled the Asian market prior to entry of its competitors, it never did enough timing to know when to change its auctioning strategy. In addition, being the dominant player made eBay become more complacent. The complacency, critics claimed, was evidenced by eBay’s move in transferring its Chinese operations’ decision-making responsibilities to its headquarters in the United States after acquiring Eachnet. In fact, critics say that this strategy caused a collapse in communication with some instances where it took weeks to correct typos on their website (Lou & Feng, 2010). Meanwhile, eBay’s compe titors paid attention to grievances by eBay’s clients and vendors. Failure to time its entry into the Asian market, more so in Japan influenced heavily its Asian success. The company’s move to join the market five months after its rival Yahoo! failed in its quest to establish itself as the leader in the Asian online auction market. In this case, there is the significant beneficial factor in establishing a foothold by a first-mover in the online auctio