How and why Ebay failed and Alibaba/TAOBAO had success in the Chinese market?

Abstract

This Master thesis is about the American multinational internet C2C corporation eBay and its failure in the Chinese market. As a successful multinational enterprise with much international market share, eBay experienced a failure in the Chinese market in a short time. The aim is finding out the reasons why eBay failed and Alibaba/TAOBAO had success in the Chinese market. It will be studied the internal and external factors respectively based on the resource-based view, competition-based view, and the country analysis. The internal studies include the assessment of eBay’and Taobao’s business model and international strategy. While the external studies are consisted by the analysis of the Chinese Internet industry with fierce competition as well as the institutional factors which provided the main reasons for eBay’s failure. At last, based on these findings, strategy adaptation recommendations for eBay regarding both the internal and external analysis will be presented. The findings are based on a collection and analysis of secondary data. The thesis is presented in five parts. In Part One, it provides an introduction to the thesis and background information of eBay, Taobao’s and the Chinese Market, it is defined the problem statement, research aim, and research questions. In Part Two, it gives an overview of our research and data collection methodology and theories used. In Part Three, it is presented the Internal analysis through the study of each firm, while in Part Four, it is detailed the external analysis. In Part Five, it concludes by presenting the recommendations with regards to the Ebay’s entry in the Chinese Market and it is recommended how eBay could be operated in this market.