Posted: March 18th, 2023
market entry challenges in Asia
eBay in Asia
In the era of globalization, economic agents in the more developed western regions turn their attention to the opportunities created by Asia. Numerous companies have been outsourcing to countries in Asia and have as such benefited from the cost effective and disciplined workforce of the region.
Still, aside from outsourcing, Asia is more recently perceived as a new source of income due to the fact that it is a large consumer market. Economic agents across the world then come to launch operations in the Asian states and hope to register benefits by serving the larger Asian market place.
While the theory of the focus on the Asian consumers does seem tempting, its actual implementation is actually difficult to achieve. And the reason for this is given by the existence of numerous differences between the western and Asian markets and industry. In other words, economic agents face major barriers when penetrating the Asian market.
This was also the case of online retailer eBay. The company entered the Asian market through various countries, including Japan, China or Korea. But in each region, it faced specific challenges. In China for instance, eBay had initially managed to position itself as leader of the online retailing community, but was eventually overthrown by TaoBao (Alibaba.com). The barrier was as such represented by competition and eBay had lost this battle as it charged fees to allow item listing, whereas its competitor did not (Mangalindan, 2006).
A similar situation was encountered in Korea. Upon penetration of the country, eBay was the undisputable leader of the industry. Gradually however, it was overcome by Gmarket, which presented its customers with better deals.
“For one thing, it places less emphasis on an open-auction format than eBay does. The company offers goods at fixed prices, with an option to negotiate with a seller on an exclusive basis. This allows buyers to conclude deals instantly instead of making them wait until all bids are completed in open auctions” (Ihiwan, 2006).
Still, the company strives to overcome this impediment and continues to operate in China. This country possesses the largest consumer market in the world and eBay remains confident that it can capitalize on it. Currently, China represents the second largest generator of revenues for eBay — after the United States. The organization strives to consolidate its position in both markets, but the most severe challenge it encounters in both market places is represented by competition.
In China then, the most notable barrier is represented by the emergence of local online retailers which can provide more cost effective services. The organization has strived to answer this challenge by lowering its fees to customers, but even as they did this, their prices were still higher when compared to those of other vendors. Furthermore, this strategic decision has contributed to the loss of overall profitability, investor trust and interest, as well as the price of the eBay stock (Mangalindan, 2006).
Another effort made by eBay in order to consolidate its position within the Asian market is represented by the development of partnerships with various local agencies, in order to promote certain events or auctions and as such access increased market shares.
“These include a tie-up with the recently held Singapore Fashion Week, where it created a microsite offering eBay’s 240 million members worldwide a window into Singapore fashion, and a partnership with Singapore operator Ml to make the online marketplace easily accessible on mobile phones. [â€¦] Other partnerships in the region include a co-branded site between eBay and Thailand’s online portal Sanook, to enable individuals and businesses to participate in local and cross-border trade through eBay’s global Web sites” (Chan).
One particular scope of these partnerships is that of enhancing the adaptability of eBay within the Asian markets, and subsequently improving the competitive position of eBay. Also as part of its adaptation strategy, eBay is providing customer specific products and actions.
“To better compete, eBay recently introduced a fashion-oriented Korean site called !!Club Sancy” that it hopes will appeal to younger female shoppers. It upped the placement of its listings in shopping-comparison sites, allowed them to be posted on personal blogs, and cut its own commissions on sellers” (Ihlwan and Hof, 2006).
A third strategic effort made by eBay in conquering the Asian market is represented by diversification — not the diversification of its operations or provision of services, but the diversification of the markets served. Traditionally focused on China as a source of increased gains, eBay has come to redirect its attention to other countries as well. The online auction company is as such focusing on launching and expanding operations in Japan, South Korea, Singapore, Malaysia, Thailand or even the Philippines (Chan). Through this strategic expansion to more Asian countries, eBay is decreasing its dependency on the revenues generated in China and is striving to create a stable expansion on the Asian continent.
Starbucks is one of the largest American corporations, with stores opened throughout the entire globe. The global expansion strategy at the coffee company is that of physical expansion through the opening of more and more Starbucks stores across the globe.
Throughout the past recent years, the coffee monolith has placed an increased emphasis on its expansion in China. The Starbucks managerial team has recognized the potential of the Chinese market place and has been emphasizing on opening more stores here. Aside from the actual stores, the Starbucks managerial team has also been considering the opening of coffee plantations in the country. Such a strategy would help it reduce costs with the imports of coffee beans, but it is also a beneficial decision as it is supported by the Chinese government and it would create new employment opportunities for the population, enhancing as such the reputation of the company in China.
“China will be the biggest growth market for the largest coffee supplier within the next two years.
Starbucks has even started to develop its own coffee farm in southwestern China to maintain the supply of coffee beans and help manage the costs. Starbucks said it would hire coffee growers in the province of Yunnan to grow Arabica seeds during the next year. Schultz hopes the quality and quantity of the Yunnan-grown coffee would meet the standards to be sold in China and around the world. He also sees this farm as an opportunity to produce a single-origin coffee that would eliminate the need to blend it with beans from elsewhere. Moreover, the Yunnan provincial government is planning to invest 3 billion yuan to increase coffee production to 200,000 tons over the next 10 years” (Business Today).
All in all, Starbucks considers a wide array of factors in its expansion in China, such as logistics efforts, coffee beans production, the relationship with the government and so on. But most importantly, this commitment to expansion in China is important from a different angle — that of the economic crisis. In more specific terms, the global economy is facing severe threats from the financial crisis and economic agents across the world encounter challenges. Starbucks considers that its expansion in China would help it overcome the challenges of the economic crisis and provide it with the necessary growth.
While in China, Starbucks is focused on expansion, the situation is more dramatic in the United States, where the company was more pressed by the crisis and it resorted to downsizing as a means of cost restructuring. Only recently, Howard Schultz, chief executive officer at Starbucks, announced that the company would close 600 of its stores in the U.S. And downsize an estimated 12,000 employees; these figures represent the largest downsizing in the corporate history of Starbucks (Waite, 2011).
The corporate decision to downsize staffs generated a chain reaction on the part of the American stakeholders, but the impacts were also felt in China. Here, the corporation’s image and reputation had suffered a hit as the stakeholders lost trust in the company. Specifically, they feared its stability and its subsequent ability to preserve jobs in China.
Chan, S., eBay has its eye on southeast Asia, Bloomberg Businessweek
Ihiwan, M., Hof, R., 2006, Out-eBaying eBay in Korea, Information Technology
Ihiwan, M., 2006, Gmarket eclipses eBay in Asia, Bloomberg
Mangalindan, M., October 12, 2006, China may be eBay’s latest challenge as local rivals eat into market share, Wall Street Journal
Waite, A., 2011, Starbucks to lay off 12,000 workers, The Internal Comms Hub
Starbuck’s global expansion, Business Today, http://www.businesstoday.org/online-journal/starbucks-global-expansion last accessed on December 9, 2011
Are you busy and do not have time to handle your assignment? Are you scared that your paper will not make the grade? Do you have responsibilities that may hinder you from turning in your assignment on time? Are you tired and can barely handle your assignment? Are your grades inconsistent?
Whichever your reason is, it is valid! You can get professional academic help from our service at affordable rates. We have a team of professional academic writers who can handle all your assignments.
Students barely have time to read. We got you! Have your literature essay or book review written without having the hassle of reading the book. You can get your literature paper custom-written for you by our literature specialists.
Do you struggle with finance? No need to torture yourself if finance is not your cup of tea. You can order your finance paper from our academic writing service and get 100% original work from competent finance experts.
While psychology may be an interesting subject, you may lack sufficient time to handle your assignments. Don’t despair; by using our academic writing service, you can be assured of perfect grades. Moreover, your grades will be consistent.
Engineering is quite a demanding subject. Students face a lot of pressure and barely have enough time to do what they love to do. Our academic writing service got you covered! Our engineering specialists follow the paper instructions and ensure timely delivery of the paper.
In the nursing course, you may have difficulties with literature reviews, annotated bibliographies, critical essays, and other assignments. Our nursing assignment writers will offer you professional nursing paper help at low prices.
Truth be told, sociology papers can be quite exhausting. Our academic writing service relieves you of fatigue, pressure, and stress. You can relax and have peace of mind as our academic writers handle your sociology assignment.
We take pride in having some of the best business writers in the industry. Our business writers have a lot of experience in the field. They are reliable, and you can be assured of a high-grade paper. They are able to handle business papers of any subject, length, deadline, and difficulty!
We boast of having some of the most experienced statistics experts in the industry. Our statistics experts have diverse skills, expertise, and knowledge to handle any kind of assignment. They have access to all kinds of software to get your assignment done.
Writing a law essay may prove to be an insurmountable obstacle, especially when you need to know the peculiarities of the legislative framework. Take advantage of our top-notch law specialists and get superb grades and 100% satisfaction.
We have highlighted some of the most popular subjects we handle above. Those are just a tip of the iceberg. We deal in all academic disciplines since our writers are as diverse. They have been drawn from across all disciplines, and orders are assigned to those writers believed to be the best in the field. In a nutshell, there is no task we cannot handle; all you need to do is place your order with us. As long as your instructions are clear, just trust we shall deliver irrespective of the discipline.
Our essay writers are graduates with bachelor's, masters, Ph.D., and doctorate degrees in various subjects. The minimum requirement to be an essay writer with our essay writing service is to have a college degree. All our academic writers have a minimum of two years of academic writing. We have a stringent recruitment process to ensure that we get only the most competent essay writers in the industry. We also ensure that the writers are handsomely compensated for their value. The majority of our writers are native English speakers. As such, the fluency of language and grammar is impeccable.
There is a very low likelihood that you won’t like the paper.
Not at all. All papers are written from scratch. There is no way your tutor or instructor will realize that you did not write the paper yourself. In fact, we recommend using our assignment help services for consistent results.
We check all papers for plagiarism before we submit them. We use powerful plagiarism checking software such as SafeAssign, LopesWrite, and Turnitin. We also upload the plagiarism report so that you can review it. We understand that plagiarism is academic suicide. We would not take the risk of submitting plagiarized work and jeopardize your academic journey. Furthermore, we do not sell or use prewritten papers, and each paper is written from scratch.
You determine when you get the paper by setting the deadline when placing the order. All papers are delivered within the deadline. We are well aware that we operate in a time-sensitive industry. As such, we have laid out strategies to ensure that the client receives the paper on time and they never miss the deadline. We understand that papers that are submitted late have some points deducted. We do not want you to miss any points due to late submission. We work on beating deadlines by huge margins in order to ensure that you have ample time to review the paper before you submit it.
We have a privacy and confidentiality policy that guides our work. We NEVER share any customer information with third parties. Noone will ever know that you used our assignment help services. It’s only between you and us. We are bound by our policies to protect the customer’s identity and information. All your information, such as your names, phone number, email, order information, and so on, are protected. We have robust security systems that ensure that your data is protected. Hacking our systems is close to impossible, and it has never happened.
You fill all the paper instructions in the order form. Make sure you include all the helpful materials so that our academic writers can deliver the perfect paper. It will also help to eliminate unnecessary revisions.
Proceed to pay for the paper so that it can be assigned to one of our expert academic writers. The paper subject is matched with the writer’s area of specialization.
You communicate with the writer and know about the progress of the paper. The client can ask the writer for drafts of the paper. The client can upload extra material and include additional instructions from the lecturer. Receive a paper.
The paper is sent to your email and uploaded to your personal account. You also get a plagiarism report attached to your paper.
PLACE THIS ORDER OR A SIMILAR ORDER WITH US TODAY AND GET A PERFECT SCORE!!!
Place an order in 3 easy steps. Takes less than 5 mins.