NY Times article "Ebay Is Expected to Close Its Auction Site In China" by Katie Hafner and Brad Stone shows the difficulties of adapting to the Chinese market.
"Acknowledging that the online auction market in China is enticingly fast-growing but frustratingly tough to crack, eBay will shut its main Web site in China and enter into a joint venture with a Chinese company instead, a person briefed on the plans of the companies said yesterday....
"The decision was also seen as a sign of the pressure Chinese government regulations put on foreign companies to set up joint ventures, even when they may be reluctant to do so for fear of helping to turn their Chinese partners into global rivals....
"Ms. Steiner also said eBay failed to understand the Chinese marketplace and culture. For example, she said, in contrast to Taobao, eBay Eachnet provided no phone support and discouraged buyer-seller contact that could lead to haggling.
"Also, she said, eBay failed to react quickly enough when Taobao entered the market with no user fees. In January, eBay Eachnet stopped charging transaction fees...."
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