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eBay in Japan

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Sunday, October 10, 2021 at 11:07 AM filed under General postings

eBay in Japan

eBay is a U.S. online auctioneer founded in 1995 as AuctionWeb by Pierre Omidyar. It has become one of the largest online auction platforms in the globe. In 1998, eBay was revamped to a more user-friendly and safer place to buy items listed on the site by allowing the use of credit cards. In 2000, the company entered the Japanese market following its success in other international marketplaces. This paper aims to discuss eBay’s entry into Japan and problems encountered there, as well as to identify current third party logistics types and their pros and cons on the global logistics level.

Entry of eBay into Japan

After a series of previous successful activities in other international markets, eBay entered Japan through its Japanese website, offering over 800 stock categories and listing them in yen. Soon afterwards, the company started facing stiff competition from the Japanese market leader, Yahoo! Japan. eBay’s strategy in the country, which included using credit cards and imposing commissions on transactions failed, and in 2002, the business decided it had no other option but to exit the Japanese market.

Reasons for eBay’s Failure in Japan

A number of reasons made the company fail to secure a foothold in Japan, but the most pertinent was stiff competition from other giant organizations, like Yahoo! Japan, which had 95% of the market share, while eBay had only 3% of it. Another reason why the business did not succeed in the area was its poor marketing and advertising. eBay relied on its users to popularize the company, failing to note that it had very few clients, while its competitor, Yahoo! Japan, had more. The former did not have an opportunity and advantage of the first mover in Japan, unlike the latter, which entered the local market in 1999, soon becoming the biggest portal in the country. Furthermore, eBay did not adapt to the Japanese culture and practices. It wanted users to provide credit card numbers despite the fact that the use of credit cards was very rare in Japan, because most Japanese customers relied heavily on cash payments. Another drawback was eBay’s practice of charging commissions for transactions, being a strategy avoided by Yahoo! Japan.

Question 1

I think that eBay entry strategy in Japan was lackluster because it failed to customize the services it offered to suit the needs of the local population. It should have moved in quickly after identifying the target market to have the first-mover advantage. eBay should have led an aggressive campaign and advertising to promote the website and to make steps to adapt to the local practices and culture. Focusing on the latter aspects as an entry strategy for the company leads to client approval. As stated by Ofili, this will make sure that the business has a good understanding of the local dynamics at the market. Clients feel at home and do not regard the company and services it offers as foreign, since everything is tailor-made to suit their everyday needs and interests.

Current Third Party Logistics

Third party logistics providers offer services to clients for their supply chain management functions, specializing in warehousing, transportation service, and operations. This arrangement gives the seller on eBay an opportunity to customize services to meet needs of potential buyers. Third party logistics is used by the company to connect sellers and buyers. eBay relies heavily on the resourcefulness of third party logistics providers to ensure the flow of merchandises and services to customers purchasing listed items on the auction website.

According to Robinson, one of the current types of third party logistics is transport-based third party logistics providers who offer services, which go beyond transportation to cover a wide-ranging set of logistics services for eBay. The advantage of this option is that other company takes care of business’s tiresome tasks. The disadvantage is that it does not control inventory directly. Another type of third party logistics service is based on distributors who have a lot of warehouses and distribution knowledge. The pros for eBay are that it has specialists who are very knowledgeable and trusted to provide this service. The cons are that finding companies who can do such job is tedious. Financial third party logistics providers are another category, which concerns commodity payments, tracking, accounting, auditing, as well as managing inventory. eBay’s advantage in case of the use of this type of logistics providers is that they save it money because they can manage bigger inventory volumes, which otherwise will be difficult for the company to deal with on its own. The major disadvantage is that if such third-parties offer a bad service, it will reflect negatively on eBay.

Conclusion

The eBay online auction company has gained success all over the world, but its failure to operate in Japan is a big learning point. eBay failed to adapt to the local culture and wasted a lot of time instead of seizing the first opportunity of becoming the first-mover advantage. eBay re-entry into the Japanese market is a good move because it now cooperates with its former enemy. It has used services of different types of third party logistics service providers to ensure there is the efficient delivery of commodities purchased by buyers from its listings.

This essay on Japanese economy and market was written by Heiley Durst, if you want to read more japan essays you can visit BestWritingService.com

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