EBay Inc. is hoping the second time’s a charm as it reenters China.
The San Jose-based online marketplace has struck a partnership with Shenzhen-based Xiu.com under which the Chinese firm will host eBay’s platform serving the Chinese consumer. The arrangement and its specifics will be unveiled in China on Monday, eBay confirmed to WWD.
According to Maureen Mou, Xiu’s senior vice president for global sourcing, the site will go live Monday. She declined to provide the financial specifics of the partnership, but said the eBay-Xiu site will be home to Western premium and luxury fashion brands on an exclusive arrangement; there will be a smartphone application, and the site will also allow for payment via PayPal, eBay’s global e-commerce payment and money transfer platform.
E-commerce sources in China said the site will likely be called ebay.xiu.com. They don’t believe that eBay made any investment in Xiu for the site launch and infrastructure. That’s because Xiu is essentially a turnkey service provider. In prior distribution arrangements, such as the one it has with KarmaLoop.com, Xiu hosts the secondary site on its existing platform and provides services such as the Chinese translation of the Web page.
EBay is returning to the fast-growing Chinese e-commerce market after failing the first time around as a result of misguided strategies and competition from local site Taobao.
EBay acquired Chinese technology platform EachNet in 2003 for about $150 million and invested another $100 million to convert it to eBay’s platform and market the new site. Homegrown Alibaba’s Taobao offered a different listing model from eBay’s, which proved to be more popular with the Chinese consumer. In addition, Western marketing initiatives didn’t resonate with Taobao’s local promotional strategies. By 2007, eBay became the poster child for its failed attempt to enter China. The business was sold to a Chinese mobile services firm, and eBay had a noncompete arrangement that expired at the end of 2011.
The eBay-Xiu partnership comes as the market is dominated by a few top players: 360buy.com and the sites that are part of the Alibaba Group, Taobao and Tmall.
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