Introduction The eBay China and the Taobao are online shopping companies which also offers trading platform in China. Taobao has employed the laggard activism strategy to not only capture the Chinese market, but also leapfrog the dominant eBay China Company. The Taobao has better knowledge of the Chinese market and disruptive technology than the eBay within the Chinese market. Unlike eBay which operates on the Customer-to-Customer (C2C) platform, the dynamic Taobao functions on the Business-to-Business (B2B) platform. Despite purchasing the Chinese based Eachnet Company, eBay failed to penetrate the Chinese market due to imbalance in factors such as the western business style. In order to penetrate the expansive Chinese market, Taobao’s business platform was modified through introduction of services such as premium customer experience, compact support from the community, and low charges for small businesses. This analytical paper explores the above differences in the perspectives of contingency paradigm, resource dependence and transaction cost paradigm, and institutional and population ecology paradigm. Contingency Paradigm The contingency paradigm describes a company’s ability on the basis of contingency of the situation. There are two kinds of companies according to this theory. The first are those that develop a good relationship with their customers to deliver a task. The second are those that are only oriented towards the task at hand. They make the accomplishment of the task as their primary aim and take all steps towards the achievement of this goal. Open-system verses closed-system The Taobao Company, its business model is based on the C2C market. The attitude of the CEO towards localization is an indication of clear goal of the company. The goal is to concentrate on the local market through use of an open-system business model. The strategy was meant to take advantage of the challenge of smallness to defeat the giant eBay Company, which depends on the closed-system approach in execution of business strategies. The Taobao Company transformed the challenge of late market entry into a competitive advantage strategy within the Chinese online business environment. Centralized verses decentralized system Unlike eBay which developed a fixed entry strategy in the Chinese market, which was characterized by overconfidence and inertia, Taobao was packaged as a humble and flexible online technological trading platform. As a result of stable knowledge of the Chinese market, Taobao jumpstarted operations through a flexible and rational business decision process. Basically, this strategy was helpful since changing would not be as costly as those companies that have fixed and mature formulas for doing business such as the eBay Company. As indicated in the case study, a decision which could be made within 9 days at the Taobao would take 9 months at the eBay Company due to the centralized management strategy. Knowledge efficiency It is apparent that the Taobao Company more efficient knowledge and experience in uniqueness of products and services in terms of standardization in order to present high quality services to the Chinese market than the eBay Company. The main variables of its business operations are connected at central point by strateg