eBay Takes New Approach in China

eBay Strategies:

As predicted in early November here at eBay Strategies, eBay has retreated to some degree in China according to reports from Fortune, WSJ and others. The plan is for eBay to partner with Tom Online to launch an entirely new auction site. eBay would own 49% of the JV and TOMO the other 51%. Reviewing the stock analyst reports on this news they are mostly positive. The thinking goes that eBay still has a foot in China and can continue to operate there with a strong partner. This is the approach Y! has taken in Japan (that crushed eBay) and also in China (with Taobao which has crushed eBay) and Korea (with Gmarket that is hurting eBay). So it is interesting to see eBay finally adopt what has clearly been the winning strategy pioneered by Yahoo! finally. The big question is will it be too little too late? With Eachnet at 30% share and falling, this transition is sure to lose some more market share.

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