Part 7 Cases Specifically Built-In Instant Messaging

614 Part 7 Casesspecifically Built In Instant Messaging Shaped A Lo

Cases specifically (built-in instant messaging) shaped a lot of the problems that eBay ran into in China. Some 200 million shoppers are using Alibaba’s Tmall and Taobao platforms to buy products, and the company accounts for almost 80 percent of online transaction value in China. Uniquely, Taobao’s built-in instant messaging system has been cited as a main reason for its edge over eBay in China. Basically, customers wanted to be able to identify a seller’s online status and communicate with them directly and easily—a function not seamlessly incorporated into eBay’s China system. Clearly, built-in instant text messaging is a solvable obstacle in doing business in China.

It sounds easy now that we know about it, but it may not always be the case when we take into account all the little things that are important in a market. How can a foreign company entering China ensure that it tackles the most important “little” things that end up being huge barriers to success? Sources Frank Lavin, “China Marketing: Five Keys for a Crowded Market,” Forbes, March 25, 2017. B. Carlson, “Why Big American Businesses Fail in China,” GlobalPost, September 22, 2013; Y. Atsmon, M. Magni, L. Li, and W. Liao, “Meet the 2020 Chinese Consumer,” McKinsey Consumer & Shopper Insights, March 2012; “Exports to China by State 2000–2011,” The US–China Business Council, 2012; A. Groth, “Best Buy’s Overseas Strategy Is Failing in Europe and China,” Business Insider, November 4, 2011. Case Discussion Questions 1. Will China maintain its strong economic growth in the years to come? Some suggest it will until 2050. What do you think? 2. If China will go from 17 million to 200 million middle- and upper-income people by the early 2020s, would the scenario presented by Best Buy not be applicable anymore? Would newly rich Chinese customers engage in this purchasing in the 2020s? 3. With Alibaba’s ownership of the very popular Tmall and Taobao online shopping systems (similar to eBay and Amazon) and its spread across the world, will a Western-based online shopping culture ultimately infiltrate China? albeit not at the historic levels seen between 2000 and 2010, when it grew about 10.4 percent annually. The growth in the 2020s is expected to be about 5.5 percent per year (until 2030), which is still far above the expected growth for the United States (2.8 percent annually), Japan (1.2 percent annually), and Germany (1.7 percent annually). And the key is that consumption will now be the driving force behind the growth in China instead of foreign investment. The consumption forecast opens up opportunities for foreign companies to engage with Chinese consumers who are expected to have more purchasing power and discretionary spending. But culturally translating market success from one country or even a large number of countries to the Chinese marketplace is not necessarily as straightforward as it may seem. Often, a combination of naiveté, arrogance, and cultural misunderstanding have led many well-known companies to fail in China. Lack of an understanding of issues such as local demands, buying habits, consumption values, and Chinese customers’ personal beliefs led to struggles for companies that had been very successful elsewhere in the world. And as global as China is becoming, cultural differences still get magnified in the Chinese marketplace. Let’s take a look at Best Buy and eBay as two examples. Best Buy, the mega-store mainly focused on consumer electronics, was founded in 1966 as an audio specialty store. Best Buy entered China in 2006 by acquiring a majority interest in China’s fourth-largest appliance retailer, Jiangsu Five Star Appliance, for $180 million. But culture shock hit Best Buy, best described by Shaun Rein, the founder of China Market Research Group. First, the Chinese will not pay for Best Buy’s overly expensive products unless they are a brand like Apple. Second, there is too much piracy in the Chinese market, and this reduces demand for electronics products at competitive market prices. Third, like many Europeans, the Chinese do not want to shop at huge mega-stores. So, these three seemingly easy-to-understand cultural issues created difficulties for Best Buy. eBay, the popular e-business site focused on consumer-to-consumer purchases, was founded in 1995. The company was one of the true success stories that lived through the dot-com bubble in the 1990s. It is now a multibillion-dollar business with operations in more than 30 countries. But China’s unique culture created problems for eBay. Contrary to the widespread cultural issues that faced Best Buy, one company in particular (Alibaba) and one feature more toys for children are made in numerous countries and then exported to buyers throughout the world. In some countries, such as the United States, certain protection exists to make sure that toys are safe for children. The U.S. Consumer Product Safety Commission (CPSC) regularly issues recalls of toys that have the potential to expose children to danger such as lead or other heavy metals. Lead may be found in the paint and in the plastic used to make the toys. If ingested (e.g., children chewing on toys), lead is poisonous and can damage the nervous system and cause brain disorders. Lead is also a neurotoxin that can accumulate in both soft tissue and bones in the body. For these reasons, lead was banned in house paint, on toys marketed to children, and in dishes or cookware in the United States in 1978. In addition, in an agreement between China’s General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) and CPSC, the Chinese agreed to take action to eliminate the use of lead paint for Chinese-manufactured toys exported to the United States. With China’s prominence as a toy manufacturing country, this agreement was a step toward making safe products for children. Still, lead continues to be a hazard in a quarter of all U.S. homes with children under age 6. A wide range of toys and children’s products, including many market-leading and reputable brands, often contain lead or other heavy metals (e.g., arsenic, cadmium, mercury, antimony, or chromium). Estimates suggest that one-third of Chinese toys still contain heavy metals. These estimates are supported by researchers from Greenpeace and IPEN, who tested 500 toys bought in five Chinese cities and found 32.6% exceeded safe lead limits. The contaminated toys pose a poisoning risk when chewed or touched, and heavy metals can enter the body through inhalation. Despite efforts to eliminate lead, the problem persists with many untested and older products remaining in circulation. Standards have become stricter since 2007, but violations still occur. The use of lead in plastics to stabilize molecules is common, but it becomes hazardous when plastics degrade and release dust. The ongoing presence of lead in toys underscores the critical importance of global safety standards and enforcement mechanisms to protect consumers, especially children, worldwide.

Paper For Above instruction

The integration of built-in instant messaging systems has significantly influenced international business operations, especially in markets like China. Taobao’s success over eBay in China exemplifies how tailored technological solutions that cater to local consumer preferences can serve as critical competitive advantages. While instant messaging facilitated ease of communication, it represented only one aspect of understanding local market nuances. For foreign companies entering China, ensuring a comprehensive approach to adaptation involves recognizing the importance of addressing countless “little” details—cultural, technological, and operational—that cumulatively impact success. Chinese consumers value direct, real-time communication, and ignoring such preferences may result in missed opportunities or failure to establish trust-based relationships.

Regarding China’s economic outlook, many experts project sustained growth until at least 2050, driven by internal consumption, urbanization, and technological innovation. However, potential challenges such as demographic shifts, trade tensions, and environmental concerns could influence this trajectory. The forecasted rise of 200 million middle- and upper-income earners by the early 2020s suggests a substantial shift in consumer power, presenting opportunities for foreign brands. Nonetheless, the success of Western brands like Best Buy illustrates the importance of cultural understanding. Best Buy’s failure in China—due to unadapted pricing strategies, preferences against large mega-stores, and high piracy—demonstrates how overlooking local cultural nuances can hinder market penetration.

The ongoing spread of Alibaba’s platforms indicates a gradual infiltration of Western online shopping culture. Although growth rates have slowed compared to the early 2000s, the cumulative increase in e-commerce and digital consumption continues to expand. Cultural differences remain a challenge; Western companies need to adapt their marketing, customer service, and product offerings to resonate with Chinese consumers’ unique preferences and values. For instance, reliance on built-in messaging systems exemplifies how technological customization aligns with local demand for immediacy and personalized communication, underscoring the importance of culturally sensitive innovation.

Water safety standards worldwide serve as a model for safeguarding against hazards like lead poisoning. The Flint crisis amplified the need for rigorous, enforceable global mechanisms. International standards such as those set by the World Health Organization (WHO) provide a framework for quality control in water treatment, emphasizing the importance of corrosion inhibitors and regular testing of water sources. Regulatory harmonization across nations can facilitate stricter compliance, reduce health risks, and protect vulnerable populations—particularly children. For consumer products like toys, adopting common safety standards for heavy metals and hazardous chemicals is crucial. International cooperation through agencies like the CPSC and AQSIQ illustrates efforts to enforce bans on lead and other toxic substances, ensuring safer products globally. Strengthening these mechanisms involves enhanced testing capabilities, stricter penalties for violations, and increased transparency to prevent contamination and exposure risks.

References

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