eBay & Yahoo! in Japan: From Competition to Collaboration
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Case Code: BSTR312 Case Length: 19 Pages Period: 2000-2008 Pub Date: 2009 Teaching Note: Not Available |
Price: Rs.300 Organization: eBay Inc., Yahoo! Inc. Industry: E-commerce Countries: Japan; Global Themes: Competition, Collaboration, Entry Strategy, Expansion Strategy |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
eBay and Yahoo! Vie for Online Auctions
Before online auction sites started operations in Japan, analysts believed that these would not be successful in the country as the Japanese were image conscious, and did not like the idea of buying second hand and used goods. Therefore, not many Japanese and international Internet companies were interested in entering the market...
Yahoo! Auctions Gains
The Yahoo Japan Auctions page was designed to facilitate easy transactions. Users found it easy to browse through the webpages, search for different items, and bid for them. Categories like home appliances, music, and video games that were of high interest to the Japanese were listed on the top. To enable new users to become familiar with the website, the procedure to bid and sell was displayed prominently and was described in detail....
eBay Fumbles
After one year in Japan, eBay was able to secure only a 3 percent share of the online auctions market, valued at US$ 1.6 billion. Not finding many takers for its online auctions, it decided to scrap fees for online transactions in March 2001...
The Reasons...
Traditionally, the Japanese were averse to using second-hand goods. They also avoided buying old goods because they believed that the bad luck, if any, of the previous owner would rub off on to the new one. Further, retail space in Japan was very expensive, making businesses dealing in used items unviable...
Looking Ahead
After its Japanese misadventure, eBay chose to expand into countries like China and Taiwan by acquiring leading auction websites, where it relied on local brands for growth and market share. According to Sherif Mityas, a vice president in the consumer business and retail practice at A.T. Kearney , "Two important issues for companies like eBay are novelty and loyalty. In North America, where eBay was one of the first companies to institute the Internet auction model, it is enjoying both. Its experience in Japan, however, has taught it that if you're not the first one in a market, it is very difficult to get people to use your site. In those markets you have to buy the leaders, and the loyal customer bases attached to them."...
Exhibits
Exhibit I: Yahoo's Business Activities (As of 2007)
Exhibit II: Softbank Corporation
Exhibit III: Internet and e-Commerce in Japan
Exhibit IV: eBay Japan's Homepage
Exhibit V: Web Page of Yahoo Japan Auctions
Exhibit VI: Web Page of Sekaimon
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