eBay withdrew from the Chinese market in 2006 after struggling to compete with Taobao.
The contest began when eBay acquired EachNet, then China’s leading online auction platform, in 2003 for about $180 million. eBay brought its global marketplace model to China, but Alibaba responded by launching Taobao as a rival consumer-to-consumer platform.
Taobao gained ground with strategies tailored to Chinese online shoppers. It offered free listings, encouraged direct buyer-seller communication through instant messaging, and introduced Alipay, an escrow-style payment service that helped address trust concerns. Taobao’s market share rose sharply between 2003 and 2005, while eBay China’s position weakened.
In 2006, eBay shut down its Chinese auction site and shifted toward a partnership arrangement with Tom Online rather than continuing to operate its original platform independently. The episode is often summarized as eBay “leaving China,” although the company did not disappear from every form of Chinese business activity overnight. The key quiz fact is the year of the site shutdown: 2006.