eBay, Xiu: A Smart Partnership eBay牵手走秀网为明智之举
A couple of weeks after news first leaked out of eBay’s (Nasdaq: EBAY) return to China through a new partnership with an online fashion seller (previous post), we’re getting more details about the tie-up with Xiu.com. My major takeaway is that this looks like a smart, well-conceived arrangement that could have a strong chance of success. EBay seems to have learned some important lessons and is applying them to this new tie-up, following its previous Chinese foray that began nearly a decade ago and ended in a failure costing the company hundreds of millions of dollars.
Most importantly, eBay is focusing on what it does best this time, namely providing resources for e-commerce firms to better run their business; at the same time, it is letting Xiu.com do most of the actual management of the new eBay Style online clothing store that the pair will open under the tie-up. If the business does well, which looks like a strong possibility, I could easily see eBay expand the partnership with Xiu to other kinds of merchandise, and for eBay to also take an equity stake in Xiu or even buy the company outright in the future.
Now that I’ve given my broader views, let’s take a look at the news that comes in a formal announcement of the tie-up between eBay and Xiu. (company announcement) The companies say their new eBay Style platform will focus on fashion products. The actual products will come from eBay’s global supply chain, which draws on the US company’s relationships with some 5,000 sellers of apparel, handbags, shoes and other health and beauty products. Xiu.com will run the actual business, including sales, logistics and customer service. Xiu will also be responsible for maintaining the actual eBay Style website to make sure it meets the needs of China’s increasingly sophisticated online shoppers.
As I said above, this new approach marks a big difference from eBay’s previous foray in China that began in 2003 with its purchase of the country’s leading online auctions site at the time. After buying the site, eBay systematically removed most of the company’s top managers and replaced them with its own western-trained people. Those new managers understood how to run a company in a commercially oriented market like the US, but were far less adept at working in a developing market like China. As a result, eBay ultimately lost a bruising battle with upstart local rival Alibaba and ended up largely leaving the market after handing over its China operations to a local partner.
This second attempt to build up its China business looks smart from a wide range of angles. By acting largely as a supplier and adviser to the venture, eBay is drawing on its biggest strength of identifying strong e-commerce suppliers and using its scale, resources and experience to work with them to help them boost their business. At the same time, eBay has realized that it doesn’t know much about operating an online store in China, and is leaving that part of the business to Xiu.
Somewhat ironically, this model is similar to the one eventually adopted by Alibaba, which now makes most of its money from its TMall platform that helps other online merchants sell their products to Chinese customers. EBay’s decision to work with a single shop owner and focus on a niche product area also looks smart to me, as it will help it to avoid problems that many of its peers are now facing in quality control and high operational costs.
The new tie-up’s biggest drawback is its relatively late arrival to China’s crowded e-commerce space, meaning it will have a lot of catching up to do against more established rivals. But on the whole, I do think the partnership is quite exciting and well conceived, and thus should stand a good chance of success over the next 2-3 year.
Bottom line: eBay’s new China tie-up looks like a smart pairing with a local online fashion goods seller that should have a strong chance of success in the next 2-3 years.
Related postings 相关文章:
