Ebay to re-enter Chinese market

Monday, 05 November 2012
Online giant eBay is to re-enter the Chinese market in a new partnership with local etailer xiu.com. The company hopes to push high-end luxury goods from the West, brands such as Calvin Klein and Coach, which are seen as very desirable by the Chinese consumer.

Ebay would be importing high-end western goods at discount prices however the company said it would not be investing in the new Chinese business, with all sales, listings and transactions being handled in partnership with xiu.com.

Ebay previously entered the Chinese market a decade ago, but was quickly undermined the following year by Taobao.com, a local competitor operated by the Alibaba group. Taobao appealed to Ebay's customers by allowing them to freely list items using well-known
Chinese cultural references. In the following years, Taobao out-innovated eBay in the country on payment systems, its ad network and customer service.

Taobao still dominates the Chinese online retail industry with a market share of 75 per cent, according to Forrester Research. To date American companies have not easily penetrated the Chinese market, as seen by Amazon, who's Chinese business has only 2 per cent market share.

While eBay will not be able to compete with domestic players, its new partnership signals a belief that it could dominate a small slice of the import market. Ebay has been bolstering its partnerships with US retailers and has evolved beyond its days as merely an auction site. It has grown its inventory of unused, last-season goods from retailers like Neiman Marcus and Macy's, which have increasing cachet in China, noted the Financial Times.

Xiu was founded in 2008 in Shenzhen and employs an estimated 1,000 people.

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