Thursday, September 16, 2004
eBay's China site to join worldwide network
Reuters Shanghai, September 16
Online auctioneer eBay Inc will plug a recently purchased China site into its global network on Friday, creating new opportunities for a nascent but fast-growing operation, its chief executive said.
US-based eBay bought homegrown Internet player EachNet in two tranches for $180 million over the past two years, and 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 (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 was now known, had 6.9 million users who traded $63 million in goods in the second quarter of this year, up 25 per cent and 28 per cent, respectively, from the first quarter.
New listings for the quarter grew 38 per cent to 4.2 million.
Shao said those growth rates were generally in line with recent increases, but 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."
SELLING COSTS
EachNet controls an estimated 60-70 per cent of China's online auction market, worth an estimated 1.92 billion yuan ($232 million) 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 Inc and Chinese online media firm Sina Corp, 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 payments for goods -- often considered a stumbling block in a nation where credit cards and cheques are relatively rare -- was receding as an issue as more people had credit cards and banks 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 95 per cent of (actual goods exchanges) were done in person," he said.
"Today, over 70 per cent of transactions happen between users in different cities. Of the remaining 30 per cent, 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."
© HT Media Ltd. 2004.