China Law Blog - eBay: How To Fail In China 101 -- What's Politics Got To Do With It? - Comments http://www.chinalawblog.com/ China Law for Business en Copyright 2012 Tue, 17 Jan 2012 23:01:03 -0800 Tue, 17 Jan 2012 23:01:03 -0800 http://www.sixapart.com/movabletype/?v=4.32-en http://blogs.law.harvard.edu/tech/rss Shaun Rein I agree with your comments Dan. Blaming connections for why a company failed here is a much easier pill for MNCs to swallow than accepting the fact that they just do not execute strategies that make sense.

Happy Holidays!

Shaun

]]> http://www.chinalawblog.com/2006/12/ebay_how_to_fail_in_china_101.html#2574 http://www.chinalawblog.com/2006/12/ebay_how_to_fail_in_china_101.html#2574 China Business Sun, 24 Dec 2006 12:48:17 -0800 Dan Hang I agree with you. Ebay and Yahoo failed to understand the needs/wants of the market, also, they react slowly to keep them in the competition. Political connections is a VERY flimsy excuse that that doesn't hold water for Ebay's failure in China.

]]> http://www.chinalawblog.com/2006/12/ebay_how_to_fail_in_china_101.html#2575 http://www.chinalawblog.com/2006/12/ebay_how_to_fail_in_china_101.html#2575 China Business Sun, 24 Dec 2006 12:48:17 -0800 Dan China Law Blog Shaun --

Great piece. So good, I'm moving it to a post. I completely concur and this is exactly the sort of thing we are constantly saying on this blog to our targeted audience of small and medium sized businesses. It would appear some in the Fortune 100 should be listening as well.

]]> http://www.chinalawblog.com/2006/12/ebay_how_to_fail_in_china_101.html#2576 http://www.chinalawblog.com/2006/12/ebay_how_to_fail_in_china_101.html#2576 China Business Sun, 24 Dec 2006 12:48:17 -0800 Dan China Law Blog Hang --

Thanks for checking in. I am a regular reader of your blog so I know you know Chinese business and it is nice to see you concurring with me on this one.

]]> http://www.chinalawblog.com/2006/12/ebay_how_to_fail_in_china_101.html#2577 http://www.chinalawblog.com/2006/12/ebay_how_to_fail_in_china_101.html#2577 China Business Sun, 24 Dec 2006 12:48:17 -0800 Dan David Li Jack Ma of Alibaba spoke in the O'Reilly Web 2.0 conference. He's behind the defeat of eBay with his free strategy on Taobao and secured the investment from Yahoo!

http://www.oreillynet.com/pub/a/network/2006/12/06/web-20-ma.html

Still remember eBay's press release a couple years ago trying to dismiss Taobao as a stunt by Jack Ma.

]]> http://www.chinalawblog.com/2006/12/ebay_how_to_fail_in_china_101.html#2578 http://www.chinalawblog.com/2006/12/ebay_how_to_fail_in_china_101.html#2578 China Business Sun, 24 Dec 2006 12:48:17 -0800 Dan China Law Blog Mr. Li --

Thanks for checking in and thanks for the great link. I will very soon be posting a follow-up post discussing Taobao.

]]> http://www.chinalawblog.com/2006/12/ebay_how_to_fail_in_china_101.html#2579 http://www.chinalawblog.com/2006/12/ebay_how_to_fail_in_china_101.html#2579 China Business Sun, 24 Dec 2006 12:48:17 -0800 Dan David Li It's a very good talk given by Jack Ma. He discussed about government impact on running Internet business in China, his view on common mistake of MNC in China and interestingly his view on the Yahoo! deal. I think he's definitely the person to watch closely.

Following eBay and Yahoo!, there seem to be problem with Google with the recent step down with the senior VP. It seems that most Internet giants have been having troubles in the Chinese market.

]]> http://www.chinalawblog.com/2006/12/ebay_how_to_fail_in_china_101.html#2580 http://www.chinalawblog.com/2006/12/ebay_how_to_fail_in_china_101.html#2580 China Business Sun, 24 Dec 2006 12:48:17 -0800 Dan China Law Blog Mr. Li --

From my extreme distance (always an easy place to be) I attribute the internet company problems in China to their arrogance. They have done so well, so quickly, in the US, they think they can just go into China and do the same thing. And who needs the Chinese when you are the internet kings? This is a business sector that needs localizing and these companies seem unwilling to give up enough control in China to make this possible.

]]> http://www.chinalawblog.com/2006/12/ebay_how_to_fail_in_china_101.html#2581 http://www.chinalawblog.com/2006/12/ebay_how_to_fail_in_china_101.html#2581 China Business Sun, 24 Dec 2006 12:48:17 -0800 Dan David Li Well, arrogance could be a reason but personally, I think this is overly used by the "Chinese consultants" to promote their business.

Google hired Lee Kaifu who set up the Microsoft Research in Beijing and central role in the how-to-kowtow-for-dummy book Guanxi. According to the book, the reason he left Microsoft was because of his "Making It In China" memo to Bill Gates was rejected. He sent the memo to Eric Schmit and got hired by Google.

Making It In China


There is a recent paper out of Wharton titled "How and Why Chinese Firms Excel in 'The Art of Price War'." It's interesting to see how it highlights the culture difference between Chinese and American firms in terms of engaging in price war. Chinese see it as norm but American firms see it as a failure of the management. The recent best seller "Blue Ocean" is all about avoiding price war.

How and Why Chinese Firms Excel in 'The Art of Price War'
http://knowledge.wharton.upenn.edu/article.cfm?articleid=1625

It may not be the MNC's unwillingness to give up control but with much of the management performance bonus tying to stock performance, the constituents are not the customers but the Wall Street Analysts. The management are enslaved to the quarterly reports. China is a small market for almost all these MNCs. Microsoft China's revenue is half of Taiwan market. One of the channel partners of Computer Associate in Taiwan bring in more business then CA's entire China market. However, China is what Wall Street Analysts want to hear and see. Too much in stake for the CEOs to give over the control.

]]> http://www.chinalawblog.com/2006/12/ebay_how_to_fail_in_china_101.html#2582 http://www.chinalawblog.com/2006/12/ebay_how_to_fail_in_china_101.html#2582 China Business Sun, 24 Dec 2006 12:48:17 -0800 Dan C.P.T. Time magazine correctly points out that, "Google has not been doing all that well in China . . . badly trailing the domestic Chinese search company Baidu." Time acknowledges the failure of EBay and Yahoo in China. Why can't American Internet companies succeed in China? Is it lack of intelligence? Arrogance? Both?

]]> http://www.chinalawblog.com/2006/12/ebay_how_to_fail_in_china_101.html#2583 http://www.chinalawblog.com/2006/12/ebay_how_to_fail_in_china_101.html#2583 China Business Sun, 24 Dec 2006 12:48:17 -0800 Dan Bill Elliott I am a regular reader of your blog so I know you know Chinese business and it is nice to see you concurring with me on this one.

]]> http://www.chinalawblog.com/2006/12/ebay_how_to_fail_in_china_101.html#16600 http://www.chinalawblog.com/2006/12/ebay_how_to_fail_in_china_101.html#16600 China Business Sun, 24 Dec 2006 12:48:17 -0800 Dan Albert S. How can a big foreign internet company succeed in China? Is it even possible?

]]> http://www.chinalawblog.com/2006/12/ebay_how_to_fail_in_china_101.html#19951 http://www.chinalawblog.com/2006/12/ebay_how_to_fail_in_china_101.html#19951 China Business Sun, 24 Dec 2006 12:48:17 -0800 Dan Patrick H. When companies fail in China, they blame China government itself when they are, almost all of the time, the problem. China is different than other countries, but not that different when it comes to the success or failure of a business.

]]> http://www.chinalawblog.com/2006/12/ebay_how_to_fail_in_china_101.html#20322 http://www.chinalawblog.com/2006/12/ebay_how_to_fail_in_china_101.html#20322 China Business Sun, 24 Dec 2006 12:48:17 -0800 Dan