Taobao vs. Ebay China

By 2008, Jack Ma, CEO of Alibaba.com Inc., was in a position to consider how to fortify Taobao’s dominant position in China’s online consumer-to-consumer (C2C) market. Ma and his company had come a long way since May 2003, when they first launched the Taobao website. Back then, eBay China dominated the fledgling market, holding over 70 percent share. It had entered China with its acquisition of the start-up EachNet, and was actively building upon that company’s first-mover advantage. By 2006, Taobao overtook eBay China, forcing eBay China to virtually exit the Chinese market. Although eBay would nominally continue to operate in China, it was no longer a concern in Ma’s plans for Taobao, which by 2008 held over 80 percent of the market. How had this upstart company overwhelmed the world’s most formidable player in the online C2C space and how would Ma meet the constant pressure to generate revenue?