Sunday, June 19, 2005
EBay’s new rival (Article on Place)
Are you wondering who's the rival to eBay? I recently read an article on this company(alibaba.com) in one of my blog subscriptions, it is very interesting. The name of the company reminds me about stories I read during my childhood about alibaba and 40 thieves, those stories are famous even today. I lost the original link where I read about this, found some other site which gives lot of details about this company.
Little back ground about eBay
Everybody would be knowing about eBay, would like to provide little bit more information in context to this blog. EBay is $34 billion revenue generating company with profits $778 millions. It now is the dominant auction site in Germany, France and Australia, crushing local rivals or buying them; it leads in Korea and Singapore; and it just launched in Malaysia, the Philippines and India. Potential future markets: Vietnam, Thailand and Indonesia.
Alibaba.com's profile
Based in Hangzhou, Eastern China, Alibaba.com advertises itself as the world's largest base of suppliers. Indeed there are nearly three million registered members in over 200 countries who have signed up since 1999. Importers, exporters, distributors, manufacturers and retailers can find trade opportunities by browsing through hundreds of thousands of suppliers and buyers as well as promoting their own wares on the site. It's revenues are around $64 millions.
Where is the competition?
EBay is facing increasing competition from Alibaba.com in Chinese mareket, one of the fastest growing economies in the world. China's population of Net users, likely to surpass 100 million this year, is second only to that of the U.S. and may double in two years. Comptetion is also extending to other emerging markets.
Challenges to eBay in Chinese market:
1.Jack Ma (CEO of Alibaba.com) is a Net star at home. He is very respectful personality in chinese business circle, that gives an edge over eBay.
2.So far not a single Western Web site has succeeded in China. AOL in 1999 launched a $200 million joint venture with China's biggest PCmaker, Legend Computer (now called Lenovo). Three years later AOLsold out, and Legend switched to a local telecom partner. All the top sites in China are homegrown:
3.Last year EBay changed the chinese website to worldwide format. The design change confused some customers, and product listings plunged--down to 250,000 from 780,000 before the switch. EBay lost some fans last May, when it changed the rules about how sellers can limit their buying audience.
4.Ebay also lags behind in offering its PayPal payment system in China, while Ma lunched is own version, Alipay, in January.
5.Taobao uses guerrilla marketing to keep up with Ebay's might. The China site advertises the cheap on hundreds of small Web outlets ignored by EBay.
For any company there will always be challenges and competitors especially in hi-tech industry the comptetion is intense compared to lot of other industries. EBay is just lagging behind Alibaba.com in chinese market but it still leading online auction website all around the world. If they continue to keep the share in the existing market they should be able to survive the comptetion from other companies.
Little back ground about eBay
Everybody would be knowing about eBay, would like to provide little bit more information in context to this blog. EBay is $34 billion revenue generating company with profits $778 millions. It now is the dominant auction site in Germany, France and Australia, crushing local rivals or buying them; it leads in Korea and Singapore; and it just launched in Malaysia, the Philippines and India. Potential future markets: Vietnam, Thailand and Indonesia.
Alibaba.com's profile
Based in Hangzhou, Eastern China, Alibaba.com advertises itself as the world's largest base of suppliers. Indeed there are nearly three million registered members in over 200 countries who have signed up since 1999. Importers, exporters, distributors, manufacturers and retailers can find trade opportunities by browsing through hundreds of thousands of suppliers and buyers as well as promoting their own wares on the site. It's revenues are around $64 millions.
Where is the competition?
EBay is facing increasing competition from Alibaba.com in Chinese mareket, one of the fastest growing economies in the world. China's population of Net users, likely to surpass 100 million this year, is second only to that of the U.S. and may double in two years. Comptetion is also extending to other emerging markets.
Challenges to eBay in Chinese market:
1.Jack Ma (CEO of Alibaba.com) is a Net star at home. He is very respectful personality in chinese business circle, that gives an edge over eBay.
2.So far not a single Western Web site has succeeded in China. AOL in 1999 launched a $200 million joint venture with China's biggest PCmaker, Legend Computer (now called Lenovo). Three years later AOLsold out, and Legend switched to a local telecom partner. All the top sites in China are homegrown:
3.Last year EBay changed the chinese website to worldwide format. The design change confused some customers, and product listings plunged--down to 250,000 from 780,000 before the switch. EBay lost some fans last May, when it changed the rules about how sellers can limit their buying audience.
4.Ebay also lags behind in offering its PayPal payment system in China, while Ma lunched is own version, Alipay, in January.
5.Taobao uses guerrilla marketing to keep up with Ebay's might. The China site advertises the cheap on hundreds of small Web outlets ignored by EBay.
For any company there will always be challenges and competitors especially in hi-tech industry the comptetion is intense compared to lot of other industries. EBay is just lagging behind Alibaba.com in chinese market but it still leading online auction website all around the world. If they continue to keep the share in the existing market they should be able to survive the comptetion from other companies.
# posted by Rambo @ 1:40 PM 
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it will be interesting to see if the china company can continue and dominate the china market as i am sure ebay will do what it can not to let that happen. if they succeed (alibaba) then does this give them a strong enough foothold to then attack ebay in other Asia markets, and then around the world ?
I would agree with your comments. My observation is they are getting foothold in other international markets as well. I was just browsing through their website just to compare the prices of agricultural products produced in my village to other markets and I could see lot of agricultural products are being sold to and from Asian countries and also from Canada.
It would be interesting to see how eBay would counter this.
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It would be interesting to see how eBay would counter this.
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