EBAY in Japan
Pierre Omidyar, a software programmer created Auction Web which later became eBay in 1995. Over the next 11 years it would acquire 24 companies making it a very successful company. In the late 1990’s eBay began to explore opportunities in the international market. It’s website was gaining popularity in Canada, the UK, and Germany. As its popularity increased it began to set up websites in several European Countries including Korea and Australia. It soon began to venture out in South America as well. By 2005, eBay was in 29 countries throughout the world and it had sales in the amount of $4.5 billion. The international market was very important to the future growth of eBay.
eBay entered Japan in 2000 with the hopes of being very successful. Yahoo had already been established there and it was successful. Soon after it entry into Japan it began to fail. It soon realized it was very difficult to establish itself and some of its practices such as charging transaction fees and the usage of credit cards was not well received by the consumers in Japan. By 2002, it had only garnished 3% of the market share for Japanese online auctions and it decided to leave Japan and the customers accessing the site they were redirected to eBay’s US website. In 2007, eBay decided to reenter the Japan market. It set up a partnership with Yahoo thinking this would improve its odds of being successful. This partnership would allow yahoo Japan customers to bid on items using their Yahoo Japan ID and eBay would list these items on Yahoo Japan Auction website. 1.
Paul Anders Schwamm, an entrepreneur from Tokyo, said that the failure of eBay is a classic case study on how not to launch a business in Japan. Analyze eBay's entry strategies in Japan and examine what went wrong with its launch.
eBay did not advertise in Japan before it launched its website. eBay’s website was too time consuming and they did not investigate the culture in Japan to see how they...
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