Download - eBay Faces Opposition in China
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The dawn of the internet
First item sold on auctionweb.com
After 2 years site name was changed to Ebay.com
Pierre is ranked #54 on Forbes top 400 richest Americans
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CEO Meg Whitman was hired in 1998 to head EBay
EBay goes public in September, listing shares on NASDAQ with the symbol EBAY
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Eachnet.com is China’s first online auction marketplace
In 2003 EBay buys eachnet.com for $180M
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In 2003 a new competitor emerged in the internet auction scene, taobao.com
Alibaba.com is ranked #1 among e-commerce and trading, according to alexa.com
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In 2006 tom.com and EBay eachnet decide a joint venture agreement in china
In the summer of 2007 EBay rejoined the online auction business in China under the same name eachnet.com
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• China is still in the primary stage of socialisms.
• In order to raise the level of marketisation we need to establish the system of a socialist market economy.
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The Chinese government and its laws with their structures in dealing with the internet give somewhat of an opportunist disadvantage to any Multinational Enterprise willing to take the risk to cross lines into China.
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Demographics Age structure:15-64
years: 71.7% -male: 487,079,770
female 460,596,384 Electricity
production: 2.5 trillion kWh
(2005) Electricity -
consumption: 2.494 trillion kWh as of 2005
Televisions: 400 million users as of 1997
Internet users: 137 million as of 2006
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Special PRC entity will be required for foreign companies to operate in business requires licenses, which usually are off limit to foreign companies.
A set of legal, regulatory and commercial agreements, as follows, will be entered to protect foreign companies interests and take over management control.
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Local PRC Entity will be granted the right to use the relevant intellectual property rights with a license fee
WFOE will be the exclusive service provider to the Local PRC Entity and the Local PRC Entity shall pay service fee to the WFOE
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The Local Shareholders irrevocably appoint the WFOE to, for and on behalf of them, exercise all the shareholder's rights, including the voting rights at a shareholders' meeting and the right to appoint directors, etc.
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The transfer price will be a nominal price or the minimum amount as required by applicable laws and regulations.
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The Offshore Holding Company extends loan to the Local Shareholders to invest in the Local PRC Entity.
Local Shareholders are under trust arrangement to own/operate Local PRC Entity on behalf of Offshore Holding Company.
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Telecommunication laws and regulations in China are evolving and subject to interpretation and will likely change in the near future
The uncertain legal and regulatory environments in China could limit the legal protections available to foreign investors.
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A VC fund company could do private fund raising;
Capital amount by commitment (not one time paid up);
Allow full capital for investment (not only 50%); Provisioning for preferred share; A fund company could be managed by another
company; Carried interests arrangement; Preset the life span of a company A company could get loans to enlarge
investment scale
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How is China’s financial environment among its fifty major cities?
Shanghai has ranked the first among the top 50 cities in China in its financial environment
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EBay’s Economic Strategy consists of 3 business segmentations, which consists of their marketplaces, their payment platform, and communication platform
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Stubhub.com: Bought by EBay in February 2007 for $292M
Stubhub.com is another EBay platform where consumers can buy and sell tickets
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EBay’s online shopping comparison website
Bought by EBay in August 2005 for $634M
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Bought by EBay in February 2005 for approximately $415M
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Payment service that enables individuals or businesses to securely, easily and quickly send and receive payments online.
Bought by EBay in October 2002 for $1.5B
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Payment service that enables online U.S. merchants to offer, and U.S. consumers to obtain, transactional credit at the point of sale
Bought by EBay in November 2008 for $910M
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Communication segment that enables VOIP calls between Skype users and provides low-cost connectivity to traditional fixed-line and mobile telephones
Acquired by EBay in October 2005 for $1.3B
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