China Cursed Foreign Internet Giants.docVIP

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China Cursed Foreign Internet Giants.doc

China Cursed Foreign Internet Giants    Though the global first deal-of-the-day website Groupon met unprecedented success in the United States, its joint venture in China Gaopeng never had the luck like in the U.S.   Truth to be told, Gaopeng, or Groupon, is not the only foreign Internet company having completely different fates in and outside China. eBay was driven out from China in 2006 by the Chinese local C2C website Taobao, which was founded in 2003 and took 53% of the market share within less than two years.   The instant communication software Windows Messenger developed by Microsoft never got the upper hand in the competition with Tecent’s QQ, which took 70% of the market by launching services tailored for local demands and a multi-level membership charging system. America Online also tried to get into the Chinese market twice but was forced out very soon.   Why foreign Internet companies cannot make use of their advantages and enjoy good development like their peers do in the fields of automobile and fast consumer goods.    The Useless Core Advantage   “Foreign companies in traditional industries like automobile and fast consumer goods usually have advantages in capital, core technologies and talents management team,” said Xu Jin, director of the consulting company Booz Co. In his opinion, foreign Internet companies usually do not have obvious advantages in these fields compared with Chinese domestic companies.   Firstly, venture capital and private equity usually help the development of Chinese domes- tic Internet companies and even spent a huge amount of money in taking a bigger market share. In comparison, foreign Internet companies do not invest too much in the initial phase after getting into China. Secondly, foreign Internet companies usually begin to consider expanding when their business pattern is matured in China, but at that time Chinese local companies have already copied and adjusted their pattern to the local market, with which the

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