Political Science

E-Bay faces problems in its Asian markets and these problems have started to ring bells for the e-bay management. There are a number of problems faced by e-bay currently in its Asian markets such as
Decreasing profits.

Falling customer base.
In some parts of Asia losses are also seen, leading to closure of e-bay activities in Japan.
Traditional competitors such as yahoo are making profits and also expanding their services to other parts of Asia successfully.

The reasons for these problems are firstly it is largely believed that e-bay didnt study the cultural dynamics of the Asian markets before entering the market and because of this they are loosing its customer base to new local entrants, who understand the people and culture better and provide services accordingly. Secondly the lack of creativity of the e-bay selling tactics is minimizing their market share in comparison to competitors such as Emarket who have introduced new interactive techniques of selling.

E-bay would never have faced these problems if they had kept the global marketing strategies in mind and would have expanded with those strategies. The most important thing that you keep in mind when you are expanding globally is the culture of the specific region you are moving into. You try understanding the behavior of the people of that region, there specific reactions to your actions and what kind of services will appeal them. Keeping the cultural aspect in mind you move forward to the marketing basics such as the 4Ps that are product, price, position and promotion. E-bay made a few mistakes in applying these marketing basics. Whenever you market any product globally you try to keep the products originality while adding some native flavor to the product which e-bay didnt do while the local competitors understood that and they designed their website which had the Asian appeal to it and thus their product was an instant hit with the consumer, these services included the fixed prices that were set and the customer didnt had to wait till the end of the auction to know if the product was his or someone elses. E-bay also lost a lot on the pricing it was doing for e.g. in China where it was charging money for the listings Ali Babas subsidiary  TaoBaos was providing free listings. They didnt keep in mind the product and what price they should charge for it and hence valuable customers were lost. Promotion was neglected to a certain extent when the Korean competitors Gmarket were promoting there product with creative strategies such as lucky auction or providing the retailers with links to their own mini pages, e-bay was promoting with its old tactics forgetting that they didnt enjoy the same amount of customer base as in the US or some countries of Europe. They completely forgot that they were competing in a region where the service was in its initial stages and still growing.

E-bay was one of the very first online stores in each of these Asian countries and they were the very first to see the potential in the Asian markets. But if we carefully follow the entry trends we see that mostly e-bay had started its operations in a certain company and than Yahoo bought some shares in a local online store such as Emarket and than suddenly e-bay starts loosing its customers and consequently its profits. This trend could also be seen in Japan, in China and now in Korea. All of this happened due to the fact that the entry and the time of entry of e-bay has been a little to early compare to their preparedness for the task.

Thus, if E-bay had employed the right global marketing practices and had entered the market with good preparation they would have been extremely successful given the fact they were the market leaders in many other countries and they saw the potential in Asian Markets very early.