Ebay leaving China? Some related thoughts on PK

Not much to add of my own on this one, but Ebay has agreed to sell of Ebay China to tom.com

Here is the bit I found very interesting.

Two reasons are cited. First, eBay, which had as much as 90% market share in China for C2C transactions, has lost significant market share to upstart (and free) rival Taobao. eBay is now left with just less than 30% market share for C2C transactions, even after moving to eliminate transaction fees in China a few months ago.

The above would now be my response to every “bozo” I have met who thinks its impossible to sit in PK and compete against ‘the giant companies with more than 2000 engineers working on the problem’.

Three sentence answer to them:

• The market always accepts new value creation.
• Take the right product to the right people with the right message (the “story” from anyone who has taken my professionalism course)
• Focus on surviving through the long uptake cycle — i.e. keep your cash flows balanced.

So, does that mean that there is an opportunity for a local Ebay version to be successful? No. Not unless you deliver a solution relevant to Pakistan built around Pakistanis.

 

On a related but different stream of thought — there is one possible reason this would be happening.

See I have heard this briefly from some PK firms as well. Coming in to this country as a foreign investor is still difficult in some ways — if in nothing else, than because you have some more regulations, and have to be governed by the local embassy. (Side note : ofcourse foreign firms continue to pour money in Pakistan because there is so much growth and almost no initiative fails).

Some firms counter this by wrapping up the ‘PK branch of foreign company’ and register a new ‘local company’.

Maybe Ebay is doing something similar? Who knows.