eBay embraces the Belt and Road Initiative? Can foreign monks chant the sutra well?

Today, eBay announced the establishment of the International Cross-Border Trade Division to join hands with Chinese cross-border e-commerce to embrace the "Belt and Road" business opportunities and launch Payment 2.0.

Among them, Lin Yizhang, CEO of eBay Greater China, will serve as the executive president of eBay International Cross-Border Trade. According to reports, in addition to continuing to be responsible for the business in Greater China, Lin Yizhang will also be responsible for eBay sites in countries along the "Belt and Road", mainly exporting Chinese products to countries along the route.

Needless to say, embracing the “Belt and Road Initiative” is a result of seeing the huge business opportunities in Greater China. This is not the first time that foreign brands have shown goodwill to the Chinese market. But the question is, can foreign brands do a good job?

In fact, this is not the first time eBay has entered the Chinese market. In the early years, eBay acquired China's largest C2C website, EachNet. However, the management did not have a correct understanding of the strong Chinese market, but directly transferred the US operating strategy to the Chinese market. After this battle, EachNet's market share dropped directly from 90% to 10%, which led to the rise of Taobao.

The outside world generally regards eBay's transfer of EachNet to TOM as a signal of its withdrawal from the Chinese market.

eBay is ambitious this time. How is it different from the past?

eBay will launch Payment 2.0, which is different from the previous payment methods in two main aspects. For sellers: sales and payment data will be unified and use the same fee system and withdraw money directly to bank accounts. For buyers, more payment methods will be provided, as well as faster and more convenient payment processes and better shopping experience.

But can these changes alone arouse the interest of Chinese consumers?

Compared with the local e-commerce companies Taobao and JD.com, eBay has few advantages to compete with. The only good card it has is that it is a global old e-commerce company and the most authentic cross-border e-commerce company.

First of all, eBay does not have its own payment technology. eBay's previous partner has always been PayPal. In February of this year, it signed an agreement with Adyen, the world's leading payment processor, to make Adyen the primary payment processing partner of the eBay platform. The full application of the new payment solution will take several years. This means that the strong cash flow brought by the payment process has almost nothing to do with eBay, and it cannot enjoy the dividends brought by payment.

Secondly, eBay's main business is still cross-border e-commerce business. However, domestic e-commerce platforms have already been involved in this business. Tmall Global, JD Global Shopping, Ymatou, Vipshop, and Kaola are all representatives of domestic cross-border e-commerce. From 2005 to 2017, cross-border e-commerce business continued to grow, and the market growth rate in 2015 reached an astonishing 30%. The above-mentioned e-commerce platforms have divided up nearly 8.8 trillion market. (8.8 trillion is the institutional forecast) It is very difficult for eBay to seize these cakes from local e-commerce.

Of course, the biggest challenge facing eBay is how to localize. The previous failure in the Chinese market was probably due to this. eBay itself is obviously aware of this. According to an eBay representative, Global Easybuy has been deeply localizing its operations. It not only combines local customs, needs and habits, establishes a localized marketing system, conducts localized data analysis and localized procurement and investment promotion; it also fully localizes human resources. For example, the customer service and after-sales teams are basically local employees.

We don’t know the specific implementation effect. In short, we still need to wait and see whether eBay, a foreign company, can chant the sutra well and gain a foothold in the more mature domestic e-commerce consumer market.