...October 11 October 11 Case 1: Taobao vs. eBay China E-Business Professor Qiu Ivy Yuwen Cai Case 1: Taobao vs. eBay China E-Business Professor Qiu Ivy Yuwen Cai 08 Fall 08 Fall Ivy Yuwen Cai E-Business Professor Qiu Case 1 Taobao vs. eBay China Due Date: October 11, 2011 A Lesson of “Doing Business in China” eBay had failed to recognize that the Chinese market and its business environment are very different in comparison to the United States. In any country, having local knowledge of your market is good; having local leadership on the ground is better. However, eBay assigns its high management positions to people who are not from Mainland China, who lack understanding of the local market. The fact that eBay had a strong brand in the United States didn’t mean it would be a strong brand in China. Security and Payment One of the most important factors, which let customers make purchase decisions, is security, and security issues are mostly related to payment process. When competing in payment services, Jack Ma and his team use their Chinese “guanxi” with key government officials and leaders in the Chinese banking industry to secure and process payment transactions. eBay has introduced its traditional payment method, Paypal, while Taobao has introduced a similar one, Alipay. Before 2007, the difference between Paypal and Alipay is the process of payment. Through Paypal, buyers pay directly to sellers, without any third party involvement...
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...only be limited to Wall Street or to Silicon Valley with investments in tech start-ups and that, with this move, Alibaba will attempt to compete against its fiercest global rivals, Amazon and eBay, in their domestic territory. Global E-Commerce Competitive Environment At present, and despite being mainly a regional player, Alibaba is the world’s second largest e-commerce company, with total B2C value sales of US$44.3 billion in 2013, according to Euromonitor International. However, when considering other indicators, in 2013 Alibaba was already the biggest online retailer in the world. For example, in terms of Gross Merchandise Volume, the Chinese company is bigger than Amazon and eBay combined, and also appears ahead of its two main competitions in terms of profits. So how do Alibaba’s operations compare with those of its main competitors? How Alibaba Compares Against its Two Main Global Competitors Alibaba vs Other E-Commerce Giants Alibaba can count on its leading place in the enormous Chinese market with around 230 million active users, not far from the entire US population, and around seven million sellers, figures that explain the disproportionately greater number of transactions compared to its competitors. Unlike Amazon, Alibaba does not sell directly. Its platforms Taobao and Tmall are pure online marketplaces, the former with millions of merchants selling directly to consumers, and the latter a virtual shopping mall, in which big brands open their virtual stores...
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...December 2006, eBay Inc., a US company that offered e-commerce, e-payments and internet communication services globally, announced its plan to form a joint venture with China-based online portal and wireless operator, TOM Online, in which eBay would have 49% ownership.1 The move reflected the increasing difficulties foreign internet companies were facing in their attempts to snatch a share of the Chinese market amid fierce competition and a changing market environment. eBay first set foot in China in 2002 by acquiring 33% interest in EachNet—a domestic online auction company, followed by a full acquisition in 2003.2,3 In 2005, eBay acquired Skype4 to expand into the online communication sector. While Skype was a wholly owned subsidiary of eBay globally, it operated indirectly in China via a joint venture with TOM Online. Due to this existing relationship between the two companies,5 TOM Online seemed to be a natural choice of partner for eBay’s subsequent decision with regards to its online marketplace business. Recognising TOM Online’s local knowledge and political connections, eBay believed that a joint venture would benefit its failing business in China and help the company further develop its Chinese market.6 Some analysts questioned whether political connections alone were the answer and suggested that eBay focus on its product and service offerings.7 Vara, V. and Chao, L. (20 December 2006) “EBay’s China retreat highlights a tough market”, Wall Street Journal. eBay (Date Unknown)...
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...study is going to introduce the acquisition of eBay and PayPal, and why eBay decided to acquire PayPal, what happened after the acquisition, and my recommendations about eBay’s acquisition strategy. I will start with the backgrounds of these companies. In PayPal's official website, it described itself as “ the safer, easier way to pay and get paid online. The service allows anyone to pay in any way they prefer, including through credit cards, bank accounts, PayPal Smart Connect or account balances, without sharing financial information." (PayPal, n.d., para 1). It is a person to person (P2P) payment system that people can transfer money easily by using its services; it is very popular in the online shopping area. Another company, eBay, was defined in its official website as an online shopping website in which individuals and companies can buy and sell various goods and services worldwide (eBay, n.d., para 1). Both companies are focusing on the online trade sector; but eBay is similar to an "auction" as well as PayPal is a payment method. Motivation Online P2P payment was a new idea at that time, and as any emerging market, many P2P services such as Flooz, Beenz, and CyberCash were failed (Punch, 2002, para 3). PayPal was one of those P2P payment companies that survived after competition. At that time, PayPal became the leader in P2P payment industry, and it was the most popular payment method in eBay auctions; more than 50% eBay users were using PayPal (LD, 2010, para 2)...
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...International Management (Fall Semester) Individual Case Write Up 1: Amazon Goes Global 1. Why did Amazon choose the United Kingdom as its first entry location? Why not other countries such as Canada and Austrlia? With the emergence of a global marketplace, Amazon has since ridden on the waves of the opportunities that comes with globalisation. After more than a decade of expansion, Amazon’s international operations accounted for about 43 per cent of its revenue, bringing in $26.28 billion in 2012. This shows the significance of targeting the international markets. However, entry into foreign market does not come without risks and costs that resulted from barriers created by distance. The CAGE Framework of distance by Ghemawat explained distance as 4 main attributes – Cultural, Administrative, Geographic, Economic.1 To address these risks and costs, it is crucial to first assess the extent and type of differences between the USA market and the United Kingdom market. Amazon’s entry into United Kingdom (UK) can be attributed to minimal distance and various similarities, which allowed Amazon to significantly reduce risks and costs. Primarily, the UK market has a lot of similarities to the US market in terms of cultural, administrative and economic distance. UK has the second most number of native English speakers (60 million), after US (231 million), and is also the place where English was first spoken. Since books were the primary products sold by Amazon, the similarity...
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...University of Nottingham Ningbo China Business School Academic Year 2015/16 Autumn Semester INTERNATIONAL BUSINESS ENVIRONMENT Lianxi Zhou EBay: China and India External Business Macro Environment Entry Report Group 2 Hugo John MASON; ID: 6513963 Boon Long Tan; ID: 6512494 Sung Jun PARK; ID: 6508247 Yasong ZHAO; ID: 6511938 Word Count: 3000 Table of Contents Introduction 2 China 3 Political Environment 3 Political and Legal System 3 Five Year Plan 3 One Belt, One Road 4 Risk 4 Economic Environment 5 Market Size 5 Currency 5 FDI 6 Socio-Cultural Environment 8 Guanxi 8 Hofstede’s Model of National Culture 9 China Recommendation 11 India 12 Political Environment 12 Political and Legal System 12 Opportunity 13 Risk 13 Economic Environment 14 Market Size 14 Currency 14 FDI 15 Regional Trade Blocs 16 Risk 16 Socio-Cultural Environment 17 Socio-Demographic 17 Trust and Uncertainty Avoidance 17 Human Resources 18 India Recommendation 19 Reference 20 Appendix 25 Introduction In recent decades a global shift has arisen and revolutionized the way businesses operate as we move into a more integrated and interdependent global economy. Known as Globalization, the e-commerce industry has been the crux of such a radical metamorphoses of nations. National economies are no longer self-contained and independent. China, having one of the fastest growing e-commerce markets at 22.6% (iResearch, 2014) has...
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...Overivew of Alibaba’s Business Alibaba is the largest e-commerce (online and mobile) company in the world based on gross merchandise volume in 2014. It is also the biggest e-commerce company in China dominating more than 80% of the country’s e-commerce market share. Alibaba operates a similar business model to eBay by providing technology infrastructure and marketing reach in the form of online marketplaces for merchants to conduct online transactions with cosumers and businesses. Unlike Amazon, Alibaba does not hold or sell any merchandise. Instead, Alibaba plays the role of a middleman to connect buyers and sellers and facilitating the transactions between them (MarketWatch: Alibaba, 2015). Thus, purchase of the physical merchandise is made directly from the 3rd party businesses (eCommerceFuel: Alibaba vs Amazon, 2014). Supporting Alibaba’s business through maintaining buyer’s confidence is its secured online payment platform, Alipay that provides escrow services. Alipay manages the bulk of the transactions that take place on Alibaba’s China marketplaces. Alibaba operates both China and global marketplaces. Its China marketplaces include Taobao, Tmall and Juhuasuan whose presence continues to dominate China’s e-commerce marketshare. At the end of 2015, Gross Merchandise Volume (GMV) transacted on these retail marketplaces was RMB964 billion (US$149 billion), an increase of 23% over 2014. Alibaba’s global marketplaces include Tmall global –an extension of Tmall, Aliexpress...
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...Comparison of eBay.com and Alibaba.com Thomas Liquori o h T a m i L s o u q . i r e m Digitally signed by Thomas Liquori DN: cn=Thomas Liquori, email=thomasliquori@a ol.com, o=thomasliquori.me, l=New York, NY Date: 2010.09.05 16:57:16 -04'00' 12/16/2009 Professor Reddi: BUS451 By: Thomas Liquori, Danauda Benjamin, and Anca Barbu EBay.com Introduction ................................................................................................................................. 3 EBay.com Products and Services .................................................................................................................. 5 TABLE OF CONTENTS Comparison of eBay.com and Alibaba.com Ebay.com Financial analysis .......................................................................................................................... 6 Ebay.com Last Three Year Financial Graphs ................................................................................................. 7 EBay.com TOWS Matrix Analysis .................................................................................................................. 9 EBAY.com TOWS Matrix Graph ................................................................................................................... 13 Competitive Forces for ebay.com ............................................................................................................... 14 EBay.com Industry Rivalry...
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...INTERNET VS STORE-BASED SHOPPING: THE GLOBAL MOVE TOWARDS OMNICHANNEL RETAILING Euromonitor International August 2014 INTERNET VS STORE -BASED SHOPPING: THE GLOBAL MOVE TOW ARDS OMNICHANNEL RETAILING Passport I LIST OF CONTENTS AND TABLES Executive Summary ..................................................................................................................... 1 Growth Drivers .......................................................................................................................... 1 Internet Retailing Trends .......................................................................................................... 2 Chart 1 Global Internet Sales by Category 2013....................................................... 2 Behaviour and Characteristics of Online Shoppers .................................................................. 3 Retailer Strategies .................................................................................................................... 4 Outlook ..................................................................................................................................... 6 Summary 1 Opportunities and Threats to Retailers ......................................................... 6 Introduction................................................................................................................................... 7 A New Way of Shopping ...................................................
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...INTERNET VS STORE-BASED SHOPPING: THE GLOBAL MOVE TOWARDS OMNICHANNEL RETAILING Euromonitor International August 2014 INTERNET VS STORE -BASED SHOPPING: THE GLOBAL MOVE TOW ARDS OMNICHANNEL RETAILING Passport I LIST OF CONTENTS AND TABLES Executive Summary ..................................................................................................................... 1 Growth Drivers .......................................................................................................................... 1 Internet Retailing Trends .......................................................................................................... 2 Chart 1 Global Internet Sales by Category 2013....................................................... 2 Behaviour and Characteristics of Online Shoppers .................................................................. 3 Retailer Strategies .................................................................................................................... 4 Outlook ..................................................................................................................................... 6 Summary 1 Opportunities and Threats to Retailers ......................................................... 6 Introduction................................................................................................................................... 7 A New Way of Shopping ...................................................
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...The DIGITAL ECONOMY I. Introduction ( Pearlson & Saunders, 2013, Introduction; Tapscott, 2014, Ch. 1) @mtpadam Week 1 1 COMMONWEALTH OF AUSTRALIA Copyright Regulations 1969 WARNING This material has been copied and communicated to you by or on behalf of the University of Newcastle pursuant to Part VB of the Copyright Act 1968 (the Act) The material in this communication may be subject to copyright under the Act. Any further copying or communication of this material by you may be the subject of copyright protection under the Act. Do not remove this notice. 1 Educational Objectives for Today • Foundations of the economy • Similarities and differences between analog and digital goods • Understand the basic concepts of the digital economy • A brief overview of the history of IT • Creative destruction and digital disruption | EBUS3050 | The Digital Economy| I. Introduction “These Google guys, they want to be billionaires and rock stars and go to conferences and all that. Let us see if they still want to run the business intwo to three years.” (Bill Gates, Microsoft, 2003) “$100 million is way to much to pay for Microsoft.” (IBM, 1982) Week 1 3 “Information technology and business are becoming inextricably interwoven. I don’t think anybody can talk meaningfully about one without the talking about the others.” (Bill Gates, Microsoft) “By 2005 or so, it will become clear that the Internet’s impact on the economy...
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...Pablo Luarca I092080 Índice de libertad económica en China. China es un país con un solo partido político y se define como un estado comunista. Se mantienen estrictas limitaciones sobre la libertad política, de expresión, de religión y de asociación. China liberó algunas partes de su economía en las décadas del 70 y el 80, lo cual logró un crecimiento económico impresionante. El índice de libertad económica de China es el mostrado en la gráfica 1. El país se encuentra por debajo del promedio mundial. Esto indica que China está lejos de brindarle a sus habitantes la adecuada libertad económica. En la gráfica siguiente podemos ver que casi tres cuartas partes de la población mundial viven en naciones mayormente controladas y reprimidas. La gran mayoría de esas tres cuartas partes vive en dos países, India y China. Entrando en detalles. Una mirada rápida a las libertades económicas en China. La fundación Heritage realiza una agrupación de las libertades económicas en cuatro áreas. Estado de derecho. Figura 1: Indicadores de China en el área de estado de derecho del índice de libertad económica. Pablo Luarca I092080 En el área de estado de derecho, el sistema judicial de China es muy vulnerable a influencia política y corrupción, sobre todo en las áreas de banca, finanzas, compras gubernamentales y construcción. Todas las propiedades deben tener arrendamientos a largo plazo debido a que la tierra es propiedad del estado y estos arrendamientos ...
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...COMPANY NOTE Initiating Coverage 27 October 2014 CHN | Technology | Internet BUY Price target $118.00 Price $95.76 The Powerful E-Commerce Ecosystem Connecting Half of China; Initiate at Buy Key Takeaway China's changing Internet user demographics and mobile development support our favorable view on e-Commerce for the next decade. Alibaba is the largest Chinese ecommerce player, with 80%+ GMV market share, but is only selling to less than 25% of the population now. We estimate well over half of Chinese population will be shopping on Alibaba’s platforms in 10 years. Initiate with Buy; PT USD118. Changing demographics & mobile support ecommerce in the next decade. As discussed in our sector note, "A Taste of Domestic Consumption: The Unleashing of China's E-Commerce Power" published on Sept 19, 2014, China’s e-Commerce growth for the next decade benefit from: 1) changing Internet user demographics towards 30+ year old age groups; 2) accelerating structural shift to online from traditional retail; 3) Chinese government’s massive support for urbanization and domestic consumption; 4) proliferation of affordable smart devices; 5) improving wireless and transport infrastructures in lower tier and rural markets, and 6) rising consumer demand for better quality, design & fashion, authenticity and timely delivery. Growth driven by mix shift towards Tmall, and improving mobile monetization. We expect Alibaba, as the largest e-Commerce player, to sell to...
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...------------------------------------------------- 497 Study Guide Module I: Industry & Competitive Analysis “Porter’s Five Forces”: 1. What is strategy (fundamental question in strategic management) a. How to achieve superior financial performance 2. Why industry Analysis? b. Industry analysis helps a firm understand the underlying economic forces that contribute to or detract from its profitability, and subsequently suggests a means for firm to find an optimal position for itself. i. Industry is a group of firms that produce products or services that meet the same needs of customers in a competitive market. ii. Industry Analysis uses economic principles to understand how profit is distributed among participants in a market (including both direct competitors and other parties such as suppliers) 3. Porters Five Forces – are a checklist of things that can affect value capture and creation c. Rivalry Among Existing firms iii. Few firms : Betrand – fight in price Cournot – fight on quantity Collusion – Firms choose price cooperatively iv. Industry concentration: % of total industry sales accounted by the 4 largest firms d. Threat of New Entrants v. Switching cost, capital requirements, access to distribution, product differentiation vi. Puts a cap on profit potential of an industry e. Power of Buyers vii. Price Sensitivity f. Power of Suppliers ...
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...CONSUMER INTERNET Bear, Stearns & Co. Inc. – U.S. Equity Research February 4, 2008 Rating Information Sector Rating Target Price YE ’08 Long-Term Growth Market Weight 26.23% (YHOO-$28.38-Outperform) MicroHoo!: Where are We Now & Where Do We Go From Here? Trading Data 52-Wk Range Market Cap. Shares Out. Dividend Yield Avg Daily Vol. Float Yahoo! Corp. $18.58 - $34.08 $25,459 MM 1,336.4 MM 0.0% 27,140,000 NA Source: FactSet It’s not often that management of a company sees its stock skyrocket ~50% in one day and have to ask themselves “Is this the best day in company history or the worst?” We believe Yahoo!'s valuation has being hampered by near-term investment concerns which weighed on investor realization of the long-term potential and value of the company. As we pointed out in our 4Q earnings note, we thought the near-term investor disappointment created an opportunity for any suitor that was remotely serious. Fundamental Data EV/EBITDA Enterprise Value LT Debt to Total Cap. Book Value 16.4x $24,681.6 MM 0.0% $7.00 • Implications to Traffic and Search Market Share. Domestically, Yahoo! and MSN together command 11% in page views market share, more than double Google’s 5% market share. In the international market, however, Yahoo! and MSN jointly account for 8% of total page views, still slightly lower than Google at 9%. On Search, the combination of Yahoo! and MSN would represent 33% of query market share in the...
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