eBay's China site to join global network

[nolookingca]

eBay bought homegrown Internet player EachNet in two bond transactions for $180 million over the past two years, and the auction giant now owns the company outright.

Since sealing the deal a year ago, EachNet has gradually been integrated into eBay's worldwide system--a process that will be complete with the Friday launch of a mirror EachNet site (at www.ebay.com.cn), said EachNet chairman Shao Yibo in an interview at the company's Shanghai headquarters.

"There are a lot of worldwide features (on eBay) that are not in China that would be useful locally," said Shao, who at 31 is a throwback to the Internet bubble wunderkinds of the 1990s.

eBay Eachnet, as the unit is now known, had 6.9 million users who traded $63 million in goods during the second quarter. The number of users was up 25 percent from the first, and the number of dollars spent up 28 percent.

New listings for the quarter grew 38 percent to 4.2 million.

Shao said those growth rates were generally in line with recent increases, but he declined to give any projections.

"In the long term, becoming part of the global network will help our growth rate. But it's harder to say in the short term," he said.

EachNet controls an estimated 60 percent to 70 percent of China's online auction market, worth an estimated $232 million (1.92 billion yuan) last year. It is the only one of the country's three best-known players to charge fees.

Two newer sites, a joint venture between Yahoo and Chinese online media company Sina, and Taobao.com, operated by homegrown Alibaba.com, both offer services free of charge as they seek to build their businesses.

Shao said eBay EachNet charges sellers a fee for listing, a sales commission and an optional fee for making listings stand out from others. Buyers pay no fees.

He said that payments for goods--often considered a stumbling block in a nation where credit cards and checks are relatively rare--was receding as an issue because more people are getting credit cards, and banks have started allowing online money transfers.

The rise of express delivery and alternatives to China's post office have also boosted the medium.

"Five years ago when we started, we encouraged local trading and estimated (that) 95 percent of (actual goods exchanges) were done in person," he said. "Today, over 70 percent of transactions happen between users in different cities. Of the remaining 30 percent, many don't meet in person. The spy movie (scenarios) are very few and far between now. They still exist, but users are very resourceful."

Source: C|Net

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