Facing Market Entry Challenges in Asia Term Paper

Pages: 5 (1402 words)  ·  Bibliography Sources: 5  ·  File: .docx  ·  Level: College Senior  ·  Topic: Business

¶ … market entry challenges in Asia

eBay in Asia

In the era of globalization, economic agents in the more developed western regions turn their attention to the opportunities created by Asia. Numerous companies have been outsourcing to countries in Asia and have as such benefited from the cost effective and disciplined workforce of the region.

Still, aside from outsourcing, Asia is more recently perceived as a new source of income due to the fact that it is a large consumer market. Economic agents across the world then come to launch operations in the Asian states and hope to register benefits by serving the larger Asian market place.

While the theory of the focus on the Asian consumers does seem tempting, its actual implementation is actually difficult to achieve. And the reason for this is given by the existence of numerous differences between the western and Asian markets and industry. In other words, economic agents face major barriers when penetrating the Asian market.

This was also the case of online retailer eBay. The company entered the Asian market through various countries, including Japan, China or Korea. But in each region, it faced specific challenges. In China for instance, eBay had initially managed to position itself as leader of the online retailing community, but was eventually overthrown by TaoBao (Alibaba.com). The barrier was as such represented by competition and eBay had lost this battle as it charged fees to allow item listing, whereas its competitor did not (Mangalindan, 2006).

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A similar situation was encountered in Korea. Upon penetration of the country, eBay was the undisputable leader of the industry. Gradually however, it was overcome by Gmarket, which presented its customers with better deals.

"For one thing, it places less emphasis on an open-auction format than eBay does. The company offers goods at fixed prices, with an option to negotiate with a seller on an exclusive basis. This allows buyers to conclude deals instantly instead of making them wait until all bids are completed in open auctions" (Ihiwan, 2006).

Term Paper on Facing Market Entry Challenges in Asia Assignment

Still, the company strives to overcome this impediment and continues to operate in China. This country possesses the largest consumer market in the world and eBay remains confident that it can capitalize on it. Currently, China represents the second largest generator of revenues for eBay -- after the United States. The organization strives to consolidate its position in both markets, but the most severe challenge it encounters in both market places is represented by competition.

In China then, the most notable barrier is represented by the emergence of local online retailers which can provide more cost effective services. The organization has strived to answer this challenge by lowering its fees to customers, but even as they did this, their prices were still higher when compared to those of other vendors. Furthermore, this strategic decision has contributed to the loss of overall profitability, investor trust and interest, as well as the price of the eBay stock (Mangalindan, 2006).

Another effort made by eBay in order to consolidate its position within the Asian market is represented by the development of partnerships with various local agencies, in order to promote certain events or auctions and as such access increased market shares.

"These include a tie-up with the recently held Singapore Fashion Week, where it created a microsite offering eBay's 240 million members worldwide a window into Singapore fashion, and a partnership with Singapore operator Ml to make the online marketplace easily accessible on mobile phones. […] Other partnerships in the region include a co-branded site between eBay and Thailand's online portal Sanook, to enable individuals and businesses to participate in local and cross-border trade through eBay's global Web sites" (Chan).

One particular scope of these partnerships is that of enhancing the adaptability of eBay within the Asian markets, and subsequently improving the competitive position of eBay. Also as part of its adaptation strategy, eBay is providing customer specific products and actions.

"To better compete, eBay recently introduced a fashion-oriented Korean site called !!Club Sancy" that it hopes will appeal to younger female shoppers. It upped the placement of its listings in shopping-comparison sites, allowed them to be posted on personal blogs, and cut its own commissions on… [END OF PREVIEW] . . . READ MORE

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