Monday, June 27, 2005

Rivalry of eBay With China's Taobao Increasingly Fierce

From The Standard: Under the hammer

"eBay entered the mainland market by acquiring Eachnet in July 2003. Since then, much of its original management team has been replaced by staff from eBay Taiwan. The newcomers include the key man at eBay China, chief operating officer James Zheng.
The idea is to have people of Chinese culture, but steeped in Western management philosophy, running the operation. But even Taiwan may be too different from the mainland to allow for an easy transfer of expertise.

''eBay is struggling in the China market. It is not as easy as they thought,'' said TR Harrington, a partner in Shanghai-based Mithras Consulting Group.

The American company's rivalry with homegrown Taobao - started by local entrepreneur Jack Ma as an extension of his Alibaba B2B marketplace - is increasingly fierce. Softbank, the high-powered Japanese technology investor, is one of Taobao's backers."

"At the end of 2004, iResearch estimated eBay's share of the Chinese market at 65 percent, versus Taobao's 29 percent. 1Pai, a joint venture between Yahoo! and Sina, was a distant third.
Recent figures from the top two firms suggest Taobao has greatly improved its standing since.
eBay China said its total transaction volume in the first quarter this year was 820 million yuan and Taobao claimed volume of 960 million yuan."

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