Question
eBay scraps transaction fees in China
Fri Jan 20, 2:11 AM ET
BEIJING (AFP) - The US online auction service eBay scrapped all sellers' transaction fees in China, in an effort to compete with local competitors offering free services, including Yahoo-invested Alibaba.com.
The online auctioneer announced the changes on its China auction website, saying transaction fees would be waived, but small fees would continue to be charged for listing products on the site's webspace and for "feature" products.
eBay's China unit, Eachnet, would also require all sellers to provide authorized online payment mechanisms to improve its credit environment, including PayPal and other escrow services, the announcement said.
The move means that sellers won't get paid until the buyers receive and are satisfied with the products, it said.
The fee cut matches the free services that have been offered by Alibaba's online auctioneer Taobao, and highlights the stiff competition the US company faces in China.
The US-based Internet company Yahoo last year invested 1.0 billion dollars into Alibaba, while eBay bought out the Shanghai-based Eachnet for 180 million dollars in a series of transactions ending in 2004.
According to the Shanghai Daily, eBay Eachnet had 17.9 million users at the end of the fourth quarter of 2005, compared with Taobao's 13.9 million users.
However, Taobao saw an increase of 3.85 million new users between September and the end of the year, while eBay Eachnet only registered 2.8 million new users during the quarter.
Taobao.com said Thursday its online transaction value reached 8.02 billion yuan (1 billion dollars) last year, seven times the previous year's level, according to the paper.
Taobao had nearly one million online cyber stores compared with 10,000 cyber stores registered on eBay Eachnet, the Shanghai Daily reported last month.
In 2005, eBay's international net profit reached 1.08 billion dollars, 39 percent growth year-on-year, but it was unclear how much of that came from China.
http://news.yahoo.com/s/afp/20060120...usinternetebay
eBay is finally experiencing something that it has not seen in the US - legitimate competition.
(Although "Alibaba" and "Taobao" are just about as catchy as "Wagglepop")
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We can only hope someday it sees it here. Maryanne
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Jack Ma, the founder of Alibaba, seems to be driving eBay crazy.
He's young, has an "in your face style" and has gone out of his way to make this a personal struggle between himself and Meg.
He came to the US last year to attend eBay Live and promote his wholesale site but was thrown out at the last minute after originally having his application for exhibit space accepted.
His response was to throw a party which was reported as one of the best events, by seller.
Last year he challenged eBay to remove all fees on the China site and their response was to dismiss him and his idea. eBay went out of their way to say how foolish the concept was, that it's wasn't a business plan, they had no need to give their services away etc. etc. etc.
Now that he's growing faster than eBay they seem to be having second thoughts. Last years stupid idea is this years business plan.
I don't know what long term effect this will have on US sellers but it is fun to watch someone tweak the dragon's nose.
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The not fun part is that it's the US sellers who are footing the bill, including underwriting the fraud on the eBay China site.
http://en.chinabroadcast.cn/855/2006.../262*44718.htm
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The move means that sellers won't get paid until the buyers receive and are satisfied with the products, it said.
Well, let's hope they leave this part in China.
Is paying after receipt of goods customary there? Is it a way for ebay to promote their site and have the sellers pay for it? Other?
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Originally Posted by reston_ray
it is fun to watch someone tweak the dragon's nose.
That's a funny way to put it.
I was just thinking this morning that I hadn't read a post by Ray in a while.
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http://www.infoworld.nl/idgns/berich...2570FC0019B76D
"'Free' is not a business model," eBay said in an Oct. 19, 2005, statement. Alibaba.com Corp.'s strategy of not charging a fee from users of its Taobao auction site for three years "speaks volumes about the strength of eBay's business in China," it said.
Blanche
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I am sure all those misery brokers selling dogs for fur and food in China will be delighted.
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Too bad U.S. sellers cannot list on eBay China and then indicate no international shipping.
Always interesting to watch two giants mixing it up. Just have to make sure one doesn't get trample.
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A big THANK YOU goes out to the eBay corporate whiz-kids who continue to support forced labor, animal cruelty and WAL MART.