Ebay Vs Taobao Case

Competing for customers

Advertising plays an important role on brand recognition and attract customers , specially to some new build companies. The advertising strategy approached by Taobao very differently than did eBay in China. In eBay's case, the company invested quite lot for the marketing campaigns in Chinese market, like to keep contracts with all the major websites and not allowed to those websites sells ads to its competitors. However, Taobao adopt a different way to introducing itself. " The company took advantage of computer bulletin board services (BBS) in China, and send thousands of messages there to introduce Taobao to the internet users". The most important thing is even eBay's ads contracts expired, Taobao can keep going on its advertising approach.

In order to improve brand recognition and acquist the customer as soon as possible, Taobao captured the market by no fees. The company made a plan would not receive any charging transaction fees for the website includes listing fees. Some researchers believed because of this way, Taobao makes users get the real benefits in online transactions, and also attracts more loyalty auction customers. The fact indicates Taobao have been quick to gain more than 60% market share and captured the market rapidly in two years. Meanwhile, some people think the main factor that Taobao succeed in China is the no-fee model, and eBay failed also due to keeping charge to Chinese customers. While by making a vote on the internet, nearly 80% Chinese people preferred using Taobao over eBay, and pointed out they were willing to pay if customers felt that they were benefits for doing so. Some consumers also marked free is not a competitive advantage business model to Taobao, the quality service made them to trust more Taobao than eBay.