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Havish Gupta
Figuring Out • 5m
How Alibaba Beat eBay in China So In 2003, eBay was leading China’s e-commerce market with over 77% market share! But then, because of one company, eBay exited China’s market and never came back again. And that company is Taobao (Alibaba’s B2C site, similar to Amazon). But how did Jack Ma manage to defeat a $30 billion company? That’s because of how Jack built Taobao! While developing their website, eBay focused on making it clean and minimalist, selling only high-quality goods with no option to bargain. They believed a better experience would attract more customers, and at first, it seemed right as they scaled to 77% market share. But, but, but—at the same time, Jack was cooking Taobao, and it worked in the exact opposite way! Taobao’s site was clumsy, sold mostly cheap and low-quality goods, and the best part? Bargaining was compulsory! Jack, being Chinese, understood local consumers better than anyone. So, he designed a platform that Chinese customers would actually enjoy shopping on. Along with that, Taobao had free listings, Alipay integration, and better customer service. As a result, Taobao, launched in 2003, crossed 80% market share in just four years of start, while eBay permanently exited the Chinese market in 2012. That’s how Jack Ma, a relatively small entrepreneur, beat a giant like eBay! “eBay is a shark in the ocean. We are a crocodile in the Yangtze River. If we fight in the ocean, we will lose. But if we fight in the river, we will win.” – Jack Ma
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