China is considered as one of the world’s biggest markets with great potential, not only because of its large population, but also because of its rapid economic growth. So, for those world giant businesses, expanding their markets to China has always been one of the major tasks.

However, in e-commerce, even one of the giant companies eBay have withdrawn from Chinese market. Why? That is because those business models that can survive in China are totally different from the business models in foreign countries, especially the Consumer Relationships part.

For example,  the auction model in eBay stop people from talking, while the selling mode in Taobao encourages communication between consumers and merchants, which caters to Chinese customers’ nature of bargaining. In addition, in the auction model, the product which has been there for the longest time will sit on the top of the website, while in Taobao, it puts the newest products on the top.

In my point of view, in order to enter a new market, one of the most important things to consider is to understand the local culture and consumer behaviors. Different business models are required for a company to survive in different environments.

Source:

David W. E-commerce Bigger in China than United States (2013 Sep. 19) http://edition.cnn.com/2013/09/19/business/on-china-alibaba-e-commerce/index.html