Ebay's market share plummets in China

eBay logo modifiedEbay has lost half its market share in China in only three months as the online auction giant struggles to get to grips with local competition in the world's largest market. News of the shocking reversal comes less than a month after eBay CEO, Meg Whitman, claimed Chinese operations were 'going well'.

New market data from Beijing-based research firm, Analysys International, shows eBay's share of revenue in China's consumer-to-consumer (C2C) auctions market slumping from 16 percent in the first quarter of the year to only 7.2 percent three months later.

$4 billion market

China's people now spend more than $4 billion a year on consumer auction websites like eBay, according to China-based analysts.

The US and European internet auction leader has been criticized for its lack of local knowledge in China. But despite giving up control of its China operation to a local firm this year, eBay has been unable to fight off an onslaught from Yahoo's joint venture partner in China, Alibaba. Instead, the move appears to have accelerated the collapse of eBay's Chinese operation.

Alibaba's consumer auction service, Taobao, increased its share of the market from 74 percent to almost 83 percent in the second quarter – with its new revenue growth coming almost entirely at eBay's expense.

CEO statement at odds with analysts' data

The market data appear to sharply contradict recent rosy statements from Ebay executives. “In China, our joint venture with TOM Online continues to go well, with the new website going live last week,” the company's president and CEO, Meg Whitman told analysts last month.

Ebay made a strong start in China's online auction market, but rapidly lost market share to Taobao after the local startup began offering auctions free of transaction costs. Despite eventually following suit, eBay's market share never recovered, and the company was forced to join forces with local internet firm TOM Online last December.

Ebay loses control

Under the deal, TOM Online owns 51 per cent of the firm. Analysys said the abrupt drop in market share may have been worsened by the upheaval of transferring eBay's Chinese auction services to the new company.

TOM Online has faced troubles of its own recently, with the parent firm deciding to delist the company's once-profitable mobile information and entertainment arm after it suffered a dramatic slump in revenues following regulatory changes in China.

Analysys estimated total sales by China's consumers at online auction sites to have reached $1.32bn in the second quarter.

Good news. Ebay will close the door in China market.

Due to Ebay has a bad reputation in their customer service. Because they don't take care their business. Someone will take care their business in the future. I hope Taobao can launch their website to compete Ebay in USA market. let Ebay suffer more lost in USA market.

eBay is a greedy firm and

eBay is a greedy firm and the only reason its surviving in the US market is because of its name. Its name has become synonymous with online auctions. Few consumers know in every transaction ebay makes more money than most sellers do.

I complete agree. eBay has

I complete agree. eBay has turned against it's sellers. It's all about Big-Business now. They take around $5 PER LISTING in upfront listing fees, then they take 10-15% of you final value, and then they tack on Paypal fees!

At the end of each listing, if you REALLY look, you're paying somewhere between $5 - $15 PER LISTING!!!

Now they're saying they are trying to attract Big Corporation to list their items Directly on the eBay site, but this is EXACTLY the OPPOSITE of what people want!!! People go to eBay exactly BECAUSE it's a FREE MARKET SYSTEM. IF WE WANTED TO GO TO THE MALL, WE'D GO TO THE MALL!!! eBay's beauty was that it was free, but it has become ugly.

It used to be, you could just buy all the stuff people had sitting around in their garage, but now their are license agreements between eBay and certain vendors, and you can't hardly list anything anymore without eBay canceling the listing and they are SO GREEDY. They KEEP the listing fees and they refuse to communicate with you about why the listing is canceled other than to email you back with a link to their "Company Policy." And even if you get into contact with their Chat-Team directly, all they say is, "I'm sorry this is a Team Trust Issue, but they do not chat directly. But you can email them at this link "..." " They have wonderful CUSTOMER service and TERRIBLE Seller Service.

I used to sell hundred$ of dollar$ a week on eBay, but I got SO sick of them constantly canceling listings for no reason that I finally just quit.

SOMEONE NEEDS to create a new auction site for America. eBay NEEDS to be taken down. eBay has crossed the line one too many times and it's time for eBay to pay.