There are many reasons why things didn’t work for eBay; one of the main reasons was the dominance of Yahoo Auctions in japan. Since they are the first ones to get in the market, they have more experience of how to fit in the Japanese market and these leads to a series of things attract new sellers, which brought new buyers and according to Masahiro Inoue, president CEO of Yahoo Japan in auctions more buyers bring sellers (pg285). What really help Yahoo Auctions was through a joint venture called Softbank one of the largest internet providers in japan. EBay never had a good start since the beginning they establish, they were a lot of reason why thing didn’t work out. The main reasons are: been the second company establishing online auctions in japan, cultural misunderstanding (which includes methods of payments and fee), not a strong joint venture. Each of this factors are things that do make a difference when you first start to expand globally on any country.
The demands and needs are not the same for every costumer and that’s why there expectations are different. One of the problem of not being the first on getting on the online auction business, is that you need to build a credibility in order to have loyal customers and new customers wanting to join in. when yahoo japan got in first in the online auction business, it created a hierarchy this means that people are comfortable using the service and they know that they will be satisfied. By the time eBay entered the market Yahoo had develop a loyal customer base (pg285). They have more of a pressure on trying to make decisions. They do not have Softbank as their venture and they do not have a business plan that culturally won’t be able to fit in Japan, the expectations for a second competitor are much higher than from the first one who started doing that kind of business. So eBay didn’t meet the expectations that costumers japan would expect, they didn’t made anything attractive or easy to use for the new users.
They are three reasons why culturally the costumers in japan didn’t like using the services of eBay: problem with the website, fees and getting asked for a credit card. In a lot of cases the eBay japan website had a lot of technical problem which lead the buyer or seller with a lot of frustration, on common problem was finding the product by categories. eBay sellers fees was one of the main problems why people where bother about because of afraid of credit card and most people who used the site didn’t had a credit card because they are young people who use eBay and also because Japanese have the culture of paying everything with money and the model eBay used was American-centric payment. When a business is going to found open markets in new countries, they really got to know the culture well. People have different backgrounds and cultures.
That’s why a joint venture is important, because they know how to approach at the market countries, they have the connections, they know the laws, and it’s like someone introducing new friends. Softbank is the largest internet provider in japan like mention before, having an allied that control most likely a great portion of the market, well it is going to be much more attractive for people to use the services of Yahoo Auction because their allied have a good reputation that know well how to satisfy their costumer, plus it’s the credibility what matter. When people don’t get a good first impression of a business there are not going to come back, that’s what happen with eBay and that’s why there got to be a proper plan to make things work out, not every culture have the same likes or dislikes, it all got to do on how to approach the costumer and be able to build a long term relation, that’s what Yahoo did and made them successful in the online auction business.
The status of eBay should be a lot better right now, they have Yahoo as one of their partners, it is like that common saying of If you can’t beat them join them. One of the problems have to do with the shipping process, is great if someone can get something from another country and paying a small amount but the shipping sometimes can me tedious specially from one country to another because of the times it takes and we live in a society where we want things as soon as possible.
EBay now have more partners to rely on in so many countries, especially on what is the online auction business; so the situation in japan shouldn’t be bad compare to when they start.There obviously people who does not approve eBay’s venture with yahoo because of the shipping problems, sometimes decisions need to be made and it might not be a pretty picture but is for the greater good of the company. It’s what best for them and getting an opportunity to finally have dominance in a country they been struggling for the past few years.