This document discusses eBay's failed expansion into China and lessons learned. It shows that eBay's market share in China dropped from 72% to 7% within a year as Alibaba's Taobao launched and gained popularity for offering a better user experience and being more responsive to the local market. Some of eBay's missteps included using a global platform approach rather than empowering local operations, not adopting a meaningful local brand, and not operating independently from its global services. The lessons are to empower local teams to adapt to the local market, use a local brand, and operate services independently when expanding globally.

1. The World Is
NOT
Silicon Valley
Preston Smalley

2. Who wants to know how
to better scale a product
or service globally?

3. Talk
Focus
● Scaling Globally
● eBay’s trouble in China
● What happened and why
● Lessons Learned
● Closing Thoughts

4. What happened to eBay in China? @prestons

5. 7%
1 year migration
to
global platform
Agile competitive
improvements
SOURCE: Stanford GSB - Taobao vs. eBay China (2010)
C2C Marketplace Share in China
72%
@prestons

6. Jack Ma (Alibaba) enters C2C marketplace
Launched May 2003
“Digging for Treasure”
Launched Feb 2004

7. 7%
1 year migration
to
global platform
Agile competitive
improvements
SOURCE: Stanford GSB - Taobao vs. eBay China (2010)
C2C Marketplace Share in China @prestons

8. C2C Marketplace Share in China
7%
SOURCE: Stanford GSB - Taobao vs. eBay China (2010)
@prestons

9. @prestons

10. User Experience
SOURCE:
Wayback Machine (2005)
@prestons
vs

11. Sales Format @prestons
Best Offer
Haggle on Price
# Qty > Credibility
Auction Focus
Low price going high
0 bids < Credibility
vs

12. Ease of Payments
vs
@prestons
Escrowed
Bank to Bank
Payments

13. Fees @prestons
FREE
No Listing Fees
No Final Value Fees
Listing Fees (new)
Feature Fees (new)
Final Value % Fee
vs

14. Kano Model @prestons

15. Product Strategy Comparison
Attributes Taobao eBay
Must Have: Browse & Search Y Y
Performance: Ease of Payments High Low
Performance: Value to Sellers High Med Free Listing Fees
Performance: Selection for Buyers Med → High Med → Low
Performance: Shipping & Trust High Med Escrowed Payments
Performance: User Experience High Med → Low Vibrant + Speed
Delighter: “Best Offer” Y N Love for haggling
Delighter: Import from Overseas N Y Not as relevant
@prestons

16. Decision Making @prestons
China Focus
China 1st
Chinese Leaders
China > Region > HQ
Global Platform 1st
Non-Native Leaders
vs

17. @prestons

18. C2C Marketplace Share in China
7%
SOURCE: Stanford GSB - Taobao vs. eBay China (2010)
@prestons

19. C2C Marketplace Share in China
7%
SOURCE: Stanford GSB - Taobao vs. eBay China (2010)
@prestons
1 year migration
to
global platform
Agile competitive
Improvements
Tried to respond to
local market needs

20. C2C Marketplace Share in China
7%
SOURCE: Stanford GSB - Taobao vs. eBay China (2010)
@prestons
1 year migration
to
global platform
Agile competitive
improvements
Tried to respond to
local market needs Divested to
Tom Online 7%

21. Lessons Learned
● Empower local operations with authority to do what it takes to win
● Use a meaningful local brand name
● Operate service independently from global platform
● Leverage product discovery & user research
@prestons

22. How is this still pertinent
15 years later?

23. Closes in UK (2011)
Tesco closes in US (2012) Mattel’s failed Barbie
in China (2011)
HD closes in
China (2012)
WeChat struggling
in the US (2019)
Banned in India
& Egypt (2016)
History keeps repeating itself… @prestons

24. The World Is
NOT
Silicon Valley
Preston Smalley
@prestons

25. Thanks!
preston@prestonsmalley.com
prestonsmalley.com
medium.com/@prestons
@prestons
linkedin.com/in/prestonsmalley