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eBay returns to China
The e-retailer will sell to Chinese shoppers through a deal with e-retailer Xiu.com.
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Topics: Alibaba, Asia, China, e-commerce spending, eBay, fashion, George Ji, international e-commerce, international marketing, Melanie Tan, online apparel sales, online marketplaces, Taobao, Tmall, Xiu.com
Nearly six years after effectively exiting China, eBay.com Inc. announced its return today to what may soon be the world’s largest e-commerce market.
EBay will create a web store called eBay Style in a partnership with Xiu.com, a retailer that has been selling fashion and luxury goods online in China since 2008. The new site, ebay.xiu.com, will sell goods from some 5,000 brands that sell on eBay.com. EBay will select the goods to offer Chinese consumers, translate product descriptions and provide site search functionality.
Chinese shoppers increasingly have been coming to eBay’s English site, with sales to Chinese consumers increasing at 40% a year, says Melanie Tan, an eBay vice president. “We believe that in the future Chinese consumers will use eBay as a passport to global fashion styles, especially for leading women’s brands and accessories, and menswear, because our broad selection of new, branded and designer merchandise will be unmatched in China,” Tan says.
“Our mission is to bring the best of the world to China, so eBay, with its global access, is an ideal partner for us,” says George Ji, CEO of Xiu.com. “Through our curation efforts, we also hope to introduce a new, more inspiring buying experience to Chinese consumers.” Xiu.com attracts 4.6 million unique visitors per month and 8.9 million monthly visits, according to comScore Inc., which measures traffic to web sites.
The partnership with Xiu.com gives eBay a new shot at the Chinese e-retail market, which has grown substantially since the company folded its China online marketplace into online properties of web portal Tom Online in late 2006. China’s Ministry of Commerce reported $124 billion in consumer online purchases in 2011, and a 53.7% growth rate. That compared to $194 billion in U.S. e-retail sales and a 16.1% growth rate in 2011, according to the U.S. Department of Commerce. If those growth rates were to continue for the next two years, China’s e-retail sales would total $293 billion in 2013 versus $261 billion for the U.S.
A report today from Alibaba Group—whose online marketplace Taobao.com drove eBay from China—underscores how quickly China’s rapidly growing middle class is taking to online shopping. Alibaba reported that its two big online marketplaces, Taobao, which is primarily for smaller sellers, and Tmall, for larger brands, generated 19.1 billion yuan (US$3.1 billion) in sales yesterday, on “singles day” in China, a Chinese version of Valentine’s Day that’s become a big day for online sales. (The date November 11, was chosen for this newly minted holiday because of the four ones in the notation 11/11.)
Alibaba reported that retailers on Tmall.com sold 13.2 billion RMB worth of merchandise and Taobao.com sellers 5.9 billion RMB. Alibaba noted that those sales on Alibaba’s properties alone—and other Chinese e-retailers also promoted sales yesterday—exceeded the $1.25 billion in U.S. sales last Cyber Monday, the Monday after Thanksgiving, as reported by comScore. The Chinese e-commerce giant also said its sales yesterday were nearly four times the roughly 5 billion RMB sold on its platform on Nov. 11, 2011.
International brands among the 10,000 Tmall merchants participating in what Alibaba calls the 11.11 Shopping Festival included adidas, Nike, Gap, Toys ‘R’ Us and Japan’s Uniqlo. Domestic companies include Yihaodian, Yintai, Newegg, Vipshop, Dandgdang and Jiuxian. Wal-Mart Stores Inc. recently acquired a 51% interest in Chinese e-retailer Yihaodian.
While most of yesterday’s sales were on Tmall than Taobao, that’s because it was Tmall that initially promoted the Singles Day sale in 2009 and remains most associated with it in consumers’ minds, an Alibaba spokeswoman says. For all of 2012, Alibaba has said that it expects Taobao’s sales to exceed those of Tmall by a ratio of five to one, with sales on Taobao totaling 1 trillion RMB (US$160.5 billion) and Tmall 200 billion ($US32.1 billion).