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Introduction to International Business & Global Marketing

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Why does eBay have problems in its Asian Market?

TUI University

Introduction to International Business & Global Marketing, Module 1

BUS 401

Dr David Hunt

Ebay's start dates back to September of 1995, when it was founded by Pierre Omidyar. The company's initial intent was to create an on-line service for individuals to auction off their personal collectible items, the on-line site was initially named, AuctionWeb. He sought co-founder, Jeff Skoll to help in creating what's now called eBay, in 1997. Mr. Omidyar and Skoll became instant billionaires with this creation. The question that arises is how a company with its overnight success can falter in the Asian Markets such as, Japan and now China and South Korea. I will make an attempt to provide you with facts on why the failure. First off, I will touch on eBay's history and then identify some key concepts of eBay that made them the giants that they are now. and also concepts of global marketing that may have been the reasons behind eBay's failure in the Asian Market's.

EBay's two founders sought the likes of one Meg Whitman, a female who was well-education at Harvard Business Schools. She, singlehandedly recruited her management team from companies such as, PepsiCo and Disney. There team focused on developing partnerships with various high-powered companies such as, General Motors, Disney, and Sun. In 1997, when eBay changes its name it began to advertise throughout the U.S. This proved its worth, by the middle part of the year, eBay oversaw over 800,000 auctions a day. When it decided to go public in 1998, its website had more than a million registered users.

Some of eBay's initial successes include; approximately 486,000 stores worldwide, 247,000stores on the U.S. site and 239,000 stores on eBay's international sites. The most costly item sold on eBay to date is a private business jet worth well over U.S. $4.9 million.

One of the key reasons for eBay's wealth was its decision to expand, acquiring the likes of PayPal and the Internet phone service, Skype. These acquisitions assured eBay over $9 billion in payments transactions and which was a 41% increase from its previous year. Also, eBay ventured out and secured an escrow service where payments could sit idly before buyers were satisfied with their items. This venture would assure the accountability of those holding the auctions. In all, it was a win-win situation for all eBay customers. So let's get to the point at hand, why the falter in the Asian Market's?

EBay's first mistake in the Asian Market was its entry decision, coming in late as it



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