Why eBay failed in China

Media Outlet: 

Pacific Standard

Why did eBay fail in China when it entered the country in 2004? Researchers think they found the answer by analyzing sales data from TaoBao, an eBay-like operation that holds 96 percent market share in China. Paul A. Pavlou, professor of management information systems at Temple's Fox School of Business, found that TaoBao had a better grasp of “swift guanxi," a Chinese concept defined as close and pervasive interpersonal relationships. "For U.S. companies who want to do business in China, they have to understand this concept,” he said.