Sat, May 29, 2010 - Page 11 News List

Postal services enlisted in eBay’s battle with Taobao

NEW AND IMPROVEDEBay is promising faster shipping and the online tracking of packages in a bid to expand its share of China’s US$586 billion e-commerce market

AFP AND BLOOMBERG , SHANGHAI

US auction site eBay announced a partnership yesterday with China Post and the US Postal Service in a new bid to re-establish itself in China, where the market is dominated by homegrown rival Taobao.com (淘寶網).

Under the plan, eBay hopes to woo Chinese merchants by developing shipping programs that make it easier for them to sell to US consumers, eBay officials said at a signing ceremony in Shanghai.

“The collaboration will make the most of the advantages of the three while helping expand profits,” Jeff Liao (廖光宇), eBay’s Greater China chief executive and head of Asia-Pacific cross-border trade, told reporters.

The partnership centers on an express delivery service to the US that will be run by China Postal Express and Logistics Corp (中國郵政速遞物流), part of China Post, and which will include online tracking systems, eBay said.

Liao said China’s e-commerce market was growing very quickly and was worth more than 4 trillion yuan (US$586 billion) last year.

He did not, however, say what eBay’s share of that market was, saying only that its Chinese transaction volumes grew “between 50 and 100 percent in 2009 and so far this year” and provided no specific figures.

The US auction site largely withdrew from China years ago after being overtaken by Taobao, part of China’s largest e-commerce firm, the Alibaba Group (阿里巴巴), which also operates business-to-business marketplace Alibaba.com.

The US firm shut down its Chinese consumer Web site in late 2006 and folded its China operations into Eachnet, a joint venture run by Hong Kong’s Tom Online Group, after Taobao won the lion’s share of the Chinese market.

Unlike eBay, Taobao charges no commission to list items for sale and the site’s revenue comes from advertising.

Starting as a consumer-to-consumer auction Web site, Taobao has grown into an online retailer that also features a growing number online shops run by big brands such as US computer maker Dell.

However, eBay is fighting to make a comeback in China, a market with more than 400 million Web users, by refocusing on export-oriented Chinese merchants who are keen to reach overseas buyers through international Web sites.

The firm’s current Chinese operations include eBay.cn, a Chinese platform targeting Chinese merchants — mostly small and medium-sized enterprises — by offering online training courses on international trade and listing tips.

In related news, eBay Inc asked the Paris appeals court to overturn a 40 million euro award to Moet Hennessy Louis Vuitton SA (LVMH), the world’s largest luxury-goods maker, for not doing enough to stop the sale of counterfeits.

The Paris commercial court erred in ruling that eBay is a party to the sales that occur on its Web sites and, as such, has a greater obligation to block fakes than it would as a simple host site, Thomas Rouhette, a lawyer for eBay, said yesterday.

Today’s hearings are part of an ongoing dispute between eBay and French brand owners over online sales of their products. While the June 30, 2008, decisions agreed with LVMH arguments that eBay is an online auction broker, eBay has had more success recently in defending its business before French courts.

L’Oreal was ordered into mediation with eBay after a Paris court found the Web site made a “good faith” effort to stop fakes, and two days ago a judge ruled against a French furniture auction group that claimed eBay should be regulated as an auctioneer.

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