Hoping to gain a foothold in one of the world's fastest-growing Internet markets, online auctioneer eBay Inc bought a 33-percent stake in Chinese auction site EachNet.
Ebay said on March 17 it will invest US$30 million in EachNet, one of the biggest online trading communities in China with 3.5 million registered users.
San Jose-based eBay, which has more than 42 million registered users around the world, has eagerly eyed more Asian expansion.
"Over the next three to four years, China's e-commerce revenue is projected to grow nearly twelvefold to more than US$16 billion," said Meg Whitman, eBay's president and chief executive.
Under the deal with EachNet, eBay will have the right to further expand ownership. Whitman and Matt Bannick, senior vice-president of eBay's international business, will join EachNet's board of directors.
EBay said the investment is not expected to have a material impact on net revenue or operating expenses this year.
The EachNet deal is eBay's second move in Asia in less than a month.
In February, eBay said it would acquire Taiwanese auction site NeoCom Technology Co Ltd, paying US$9.5 million in cash and a yet-to-be determined amount of working capital. NeoCom claims to be the leading Internet auction company in Chinese Taipei as measured by the total value of goods bought and sold on the site.
A year ago, eBay acquired a majority stake in South Korea's largest online auction business, Internet Auction Co Ltd, for about US$120 million.
Ebay entered the Japanese market in 2000, but will close that site on March 31 in a rare sign of defeat. Even without charging user fees there, eBay ranked a distant fourth in the market and never got close to Yahoo! Japan Corp, which is that country's No 1 player in online auctions.
Today, China has more than 27 million consumers online, making it the world's fifth-largest Internet population behind the United States, Japan, Germany and the United Kingdom.
Citing market research from the International Data Corp, eBay said China is the fourth largest e-commerce market in Asia, and its online commerce is expected to nearly double every year for the next four years.
"Ebay is preparing for the growth there though it's still a question of when the market will really take off," said Jeetil Patel, analyst with Deutsche Banc Alex Brown. "But it's better for eBay to be early than late."
EachNet was founded in Shanghai in August 1999 by two US-educated Chinese entrepreneurs, Bo Shao and Haiyin Tan.
(China Daily March 19, 2002)
