Ebay, Global Sources team up on China's e-commerce

Making good on a pledge to increase its stake in China's Internet e-commerce sector, online auctioneer eBay said Thursday it had teamed up with Global Sources to develop an Internet service that could make it even easier to find low-priced Chinese goods.

The new online service, dubbed Global Sources Direct, is aimed at businesses, particularly eBay's PowerSellers, top eBay performers who boast consistently high sales and positive ratings from users.

By working with Global Sources, eBay aims to help its PowerSellers worldwide to source product directly from manufacturers in Asia, and especially in China, it said in a statement.

The tie-up comes just four months after eBay executives called China the "largest e-commerce opportunity today" and said they would invest $100 million in the country during 2005.

"Formal terms (of the deal) are strictly confidential. But there's not much equity involved -- this is a strategic alliance," said Camellia So, a spokeswoman for Global Sources. The new operation won't be up and running until later this year since an agreement has only just been reached, she said.

Global Sources, with 34 years as a trade magazine publisher and nearly a decade conducting business-to-business trade online, said the deal would give its list of over 130,000 suppliers more ways to advertise, market and sell their products.

EBay entered China in 2002 when it bought one third of EachNet.com for $30 million. It acquired the remaining two thirds a year later for an additional $150 million and finished integrating the site with eBay's international network in September last year.

Global Sources has been operating in China for 23 years, the company said.

A number of companies have sought ways to increase their online business in China, particularly in e-commerce. Yahoo has a joint venture in China with Sina, while Hong Kong-based Alibaba.com is well known in the region. The latter operates a major business-to-business portal under its own name as well as the Taobao.com consumer-to-consumer site. In July last year Alibaba.com said it would invest 350 million renminbi ($42.3 million) into Taobao.com.

EBay sees China as a growing opportunity due to its huge population of Internet users, which already exceeds that of Germany and the U.K., supported by a middle class it expects to reach 170 million households by 2010, company executives have said.