E-Bay Asia According to Different

E-Bay Asia

According to different sources, eBay's rate of new subscribers has declined from 41% in Q1 2005 to 35% in Q2 2007, while the number of actual listing on the site has dropped with 6% in a comparison from Q2 2007 to Q2 2006. At the same time, companies such as Yahoo were keen to squeeze into the market gap provided by this drop in eBay market share.

The first difference made between the two companies and one element of attractiveness that likely moved customers away from eBay and closer to Yahoo was price-related. While on one hand, eBay raised its prices for a listing from $1.72 in Q2 2006 to $2.31 Q2 2007 (a 35% rise), Yahoo virtually eliminated fees charged for its auction site, both in terms of listing fees and the percentage - based on each sale. This direct approach in decreasing prices was felt in customer response.

In Asia, local competitor, such as the Chinese company Taobao started their services already free of charge, which was obviously enough incentive to move customers away from eBay.

Other voices have committed to the idea that eBay's increase in prices was in fact determined by its loss of confidence in the capacity of the online auction market to continue to grow. This meant that a price increase could still keep current company revenue levels, despite a decreasing demand.

These general consideration can be well applied on the Asian market as well, especially considering the fact that this market is particularly price sensitive due to lower average revenues than in Western countries. However, even more than this, the dropping market share on the Asian market was also generated by the fact that companies such as Yahoo had already been presented on the Asian market at a much earlier date than eBay, which allowed these companies to create a proper infrastructure and develop their business in Asia.

One direct cause of market share drop for eBay in Asia was also the existence of strong local competitors who, despite having much lower resources, benefited from a better knowledge of the market. One excellent example in this sense is Chinese competitor alibaba.com. The results were that in China alone, eBay's revenue share of the C2C market dropped by 16% in the first quarter of 2007. Again, the lack of knowledge on the local market, combined with the incapacity to react to local market stimuli, despite hiring a local company to manage operations there, were direct causes of these problems.