Doug Pierce is co-founder and Director of Research at Digital Due Diligence, a boutique research firm focusing on in-depth analysis of Internet properties.

Not even a year after newegg.com went live in California did newegg.com.cn launch in China. A decade each of online retail later, the outcomes couldn't be more different: newegg.com became the second largest online-only retailer in the US, while their counterpart in China has incurred operating losses since inception.

It should have been a cakewalk: "Many of our senior managers and executives are Chinese, know the language, and have a deep understanding of the culture and business climate," management confidently wrote in their 2009 IPO prospectus, which has since been shelved. Despite entering the country in 2001, when China only had 23 million Internet users, Newegg China today trails 360buy.com, established in 2004, and finds itself fending off numerous domestic startups who all want to be the go-to online retailer for gearheads.

The reasons why Newegg has not yet been able to establish a market-leading position in China are multifaceted and complex.

Source:techrice