May 2006 Archives

Red Herring reports today about a new alliance between eBay and Yahoo!, in a bid to "resist rivals like Google and Microsoft":

"The companies plan to expand an existing advertising and search relationship so that Yahoo becomes the exclusive third-party provider of all graphic ads throughout eBay. Yahoo will also have an exclusive deal on some of the sponsored search results on eBay, though the extent of those was unclear. Yahoo is also going to provide more current links to items for sale on eBay for users who do their searches from Yahoo's site. As web-based advertising continues to prove its ability to bring in revenue, even web sites like eBay that have been strong e-commerce players are looking for ways to increase their profits from online ads and search."

From a global perspective, the possible benefits of such an alliance are clear. In China, on the other hand, it gives birth to a perplexing situation: eBay's largest competitor in soon-to-be the world's largest online market is TaoBao.com. TaoBao.com is owned by Alibaba.com. As it happens, Yahoo! owns 40% of Alibaba, and Alibaba is responsible for all of Yahoo!'s activities in China.

This means that Yahoo! China is both eBay's biggest competitor and its strategic partner.

The war between TaoBao.com and eBay.com is probably the bloodiest one in the short history of China's internet. Both companies are pouring money on advertising like there's no tomorrow. eBay throws in the cash money it made in other countries, and TaoBao.com is spending the US 1 Billion its parent company received from Yahoo!. eBay is lagging behind TaoBao and earlier this year was forced to change its business model and stopped charging sellers a transaction fee.

On the other front, the situation of Yahoo!'s Chinese search engine is even worse, as it holds a market share of less then 10% and lags far behind Baidu and Google.

So, is Yahoo! international in a position to force Alibaba's Jack Ma to cooperate with eBay? I think not. Alibaba and TaoBao are leaders in their market, while Yahoo! China's search engine is (still) no more than a small fish that happens to carry a familiar name.

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Agent AIKA, IKEA China, AIKA, AIJIA.jpg
Is IKEA china playing love games with its local competitor? IKEA opened its first store in China in 1998. AIKA, one of its biggest local competitors, uses a brand name that is disturbingly similar to that of the Swedish giant.

Things get even worse when looking at the two companies' local brand names. IKEA's Chinese name is YiJia (宜家), meaning something along the lines of "a proper home". AIKA's Chinese name is AiJia (爱家), meaning a "loving home" or "love home". It sounds almost the same as IKEA's YiJia, but adds the "love" element.

A few weeks ago, IKEA opened a new store in Beijing. The campaign to promote the new store features a new catchphrase - AiDeXinTiYan (爱的新体验). The official English version is "more to love" but the literal translation is closer to "a new experience of love". Some may see this as IKEA's jab at AIKA, trying to appropriate the local competitor's signature emotion.

But it seems that IKEA is not the only one chipping away at AIKA's brand name. AIKA is also the name of a famous Japanese anime star. Absolute Anime, a site containing detailed information about anime characters, describes AIKA as:

"a secret agent with the skills, the wits, and the little surprises to take on the impossible... Agent Aika is an action adventure full of pretty ladies, guns, action, drama, and a definite emphasis on the ladies: tons of panty shots and more than a little skin."

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Note: The views and observations expressed on this web site are published for the sake of public discussion and do not represent my personal opinion or the opinion of my companies, clients, and/or employers. If you would like to get my opinion on anything, ask me.

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