First, eBay failed to recognize that the Chinese market and the business environment are very different from that of the West. EBay sent a German manager to lead the China operation and brought in a chief technology officer from the United States. Neither one spoke Chinese or understood the local market. It was eBay’s biggest mistake. Second, because the top management team didn’t understand the local market, they spent a lot of money doing the wrong things, such as advertising on the Internet in a country where small businesses didn’t use the Internet. The fact that eBay had a strong brand in the United States didn’t mean it would be a strong brand in China. Third, rather than adapt products and services to local customers, eBay stuck to its “global platform,” which again did not fit local customers’ tastes and preferences.
eBay China was centralized to eBay headquarters in the U.S. which turned the table for Ebay in the Chinese market as this led to change of one of the factors mentioned as ownership and also a new COO was appointed with german origin and resignment of Shao Yibo came as mistrust for the people towards the company. Although eBay’s market entry strategies such as joint ventures, licensing, and acquisition are very effective and made eBay successful in global market and become the world’s largest online market place, the situation in Chinese market was totally different. EBay was popular and had a very good reputation in the U.S. and international market, but Chinese people did not know much about eBay.