Taobao vs. Ebay China The Internet Oligopoly Market

Taobao vs. EBay China The Internet Oligopoly Market The Chinese online C2C market has two main players, EBay China and Taobao who largely control the market. Their products are identical and the action of one company directly affects the other. For example, Taobao was launched with an entirely no-fee model thereby greatly affecting the chances of eBay in implementing the payment system, An Fu Tong (Secure Pay). The importance of oligopolies in internet markets is that with limited companies controlling the market, it is difficult for one to make unjustified price increases. If such increases are not adapted by the other companies, it will be detrimental the one that introduced them, it can lose shares in the already limited market. The likely possibility is that consumers will turn to other providers for the same product at reduced rate (Perloff, 2008, p.445). This is evident in the case of Taobao and eBay China, the no-fee model adapted by Taobao was the main reason eBay bowed out of the Chinese online C2C market. In addition, it also worked against Taobao when it introduced bidding for ranking In the internet oligopoly market, mergers and acquisitions enhance market concentration. It is evident in the Chinese online C2C market, that the more concentrated it is leads to price wars. These price wars are beneficial to the consumers. Strategic Possibilities for EBay China The management of eBay China can re-conquer their position as market leader in the C2C onlineShow MoreRelatedMarketing and Internet Service Industry Essay example10345 Words   |  42 PagesFigure 3 List of TablesChapter One Introduction 4 1.1 Background of Chinese Internet service industry 5 1.2 Background of Tencent 7 1.3 The current events - Tencent VS 360 Safeguard 9 1.4 Scope, sources and methodology 10 Chapter Two: Literature Review 12 2.1 PEST analysis 12 2.2 SWOT 15 2.3 More on the difference and relationship between PEST and SWOT 16 2.4 Marketing Mix (4P) in Internet contexts 17 ÃŽ » Products or services 19 ÃŽ » Price 22 ÃŽ » Place 24 ÃŽ »