Why E-Businesses Fail in China - Dissertation Example

When Ebay entered the Chinese market it anticipated remaining competitive based on its reputation among Western markets and thus did not modify its presence in China to compliment Chinese culture and China’s consumer market preferences and values. Taobao on the other hand, entered China’s consumer market with a direct handle on China’s culture and consumer values and preferences.  The word Taobao means “digging for treasure” and thus immediately resonated among Chinese consumers.

Thus it was obvious early on that “Taobao had an upper hand against its global counterpart because it understood Chinese customers”. Thanasankit argues that in e-commerce, the impact of culture is an important feature for websites to factor in since websites are marketing products, ideas or services.  Therefore when marketing to a foreign culture marketers need to “understand and adopt the cultural strategy of the system/nation it is attempting to market to.” While marketing techniques might work well with one culture, the same marketing techniques “could result in dismal failure in another.

” Carlin acknowledges that there are ample opportunities for Western companies to enter China’s consumer market via e-commerce.  However, Western companies will not be able to take advantage of these opportunities unless they are willing to modify their methods and approaches to B2C, consumer-to-consumer (C2C) and B2B markets.  Necessary modifications will involve demonstrating an understanding of the significance of culture in e-commerce. The need to understand and adopt to culture is not only applicable to China.

  With globalized businesses, Western organizations must be prepared to “learn, adapt and overcome cultural business hurdles” in order to be able to compete in global markets. For the purpose of this research study we adopt the definition of culture used by Hsu. Hsu defines culture as including:
Not only the material features of the human environment, but the conceptual features—the ingrained beliefs, science, myths, religions, laws and other tenants, held by a group of people.

Culture in the course of business transactions involves “the perceptions and attitudes which a group of people or a country have about money, credit, and mutual trust between” consumers and business providers, towards banks and other institutions, the government, and “in terms of shopping behaviour”.