Dec. 19 (NBD) -- The system failure of EachNet, a consumer-to-consumer (C2C) platform which used to take up 80 percent of the market share in China back in 2003, has raised many concerns among sellers on the platform.

On 16 November, EachNet announced a two-week server maintenance, which would affect all C2C and Cross Border Trade (CBT) business activities on its website.

However, after the maintenance period ending on Dec. 9, sellers anxiously founded that the money they withdrew from the platform hadn't been transferred to their bank accounts, and they hadn't received any notice.

It is noted that this is not the first time that sellers meet difficulty to make withdrawals. In October of 2012, around 200 sellers were reported to have trouble transferring their balance to the bank accounts for more than half of a month because of the system failures, with a total of over 3 million yuan (454 thousand U.S. dollars) unable to be withdrawn.

Photo/VCG

It has been 18 years since EachNet was found in 1999. The number of its registered members climbed to 40,000 in two months after its establishment, with over 10 million yuan (1.5 million U.S. dollars) of online shopping transactions.

In 2002, the website gained investment from eBay, the biggest international e-commerce platform at that time. 

EachNet reached its peak in 2003, becoming a C2C giant which took a market share of 80 percent in China. EBay then acquired all stakes in EachNet in June of the year.

Renamed eBay EachNet, the company's market share started to shrink due to its American operation mode, for example, its website still charges users for services.

By contrast, Taobao, which was set up in 2003, witnessed a rapid expansion in number of registered members to more than 3 million in one year, with a daily turnover of 9 million yuan (1.4 million U.S. dollars).

According to the data from China Internet Network Information Center, the market share that eBay EachNet had declined to 29 percent in 2006 while Taobao grasped about 70 percent of the market share.

In April 2012, as eBay spun off its Chinese business into a separate company, EachNet became a wholly-owned subsidiary of TOM Group.

In the C2C online shopping market, Taobao held a commanding market share of 95 percent in the second quarter of 2012, while EachNet only occupies a negligible market share of 0.01 percent, according to released by iResearch, a market survey institute. 

Yu Simin, e-commerce analyst of China E-commerce Research Center, told NBD that the failure of EachNet was caused by its a series of unacclimatized decisions. 

He further explained that the website adopted the same charging modes both in China's market and the overseas one, and it didn't make changes when facing the competition with Taobao which provided services for free to win a large number of users.

The collaboration with eBay led to the great loss of users as well as competitiveness, he added. 

NBD noticed that eBay EachNet had made some changes to secure its market share, such as offering exemption from service charge since 2006 and providing convenient payment method. However, the strategies came too late to grab market shares from Taobao.

How can EachNet survive as e-commerce platforms tend to achieve the integration of the online and offline business?

Lu Zhenwang, an e-commerce analyst, said to NBD that it is not easy for EachNet to operate both online and offline business if the website doesn't have abundant online resources.

Yu Simin agreed, noting that EachNet should upgrade the website and promote the customer service and after-sales technology, so as to rebuild the reputation and then seek for development.

Email: zhanglingxiao@nbd.com.cn