eBay’s Strategy in China: Alliance or Acquisition ebay made the mistake of entering the China market with limited local market knowledge. They applied previous successful strategic strategies from the US market but didn’t alter its business model or strategy to meet the needs of the market in China. They assumed that acquisitions would be suitable for this market but the reality is the consumer in China does not trust non-local companies so they should have conducted more thorough market research and applied an alliance strategy from the beginning. The alliance strategy would have reached the Chinese consumer sooner and created the trust relationship. They also should have identified how their competition was operating. eBay was charging fees for services that it’s competitors were not and they didn’t incorporate escrow into the sales process, which did not cultivate trust with consumers. Trust is imperative in the culture of the Chinese market. Upon losing considerable market share to competitors they embarked on a joint venture with TOM online. The problem is how can eBay leverage the joint venture for success and what alternatives do they have for enhancing it’s strategic position in the Chinese market. eBay’s joint venture with TOM online will leverage success through depending on TOM’s local knowledge of the market and combining resources to address customer needs. eBay can use the technological expertise of TOM to create innovative approaches to its products and services, to not only meet the needs of consumers but to stay ahead of what the competition offers. They need adapt from a centralized management
