Whitman declined to comment on rumors that eBay had found a local partner for its PayPal online payment subsidiary, which launched in China in 2005. "We are very committed to PayPal here in China. It has been a very big success both on the eBay platform and elsewhere, and our plan is to continue as is," she said. PayPal has a non-exclusive agreement with Tom Online. Neither Wang nor Whitman made any reference to a change of strategy for PayPal in China or regarding the joint venture.
Whitman said that eBay would continue to operate its Kijiji International Ltd. online classified ad services independently in China . The service launched last year in 50 countries including China. She declined to speculate on her expectations for its performance, beyond saying she would see how it was doing in China one year from now.
"EBay's move to hand over its business to a team and a company that is fully focused on China is long overdue. It is proof that for foreign companies to compete in China's online industries," said David Wolf, CEO of Wolf Group Asia Ltd., a Beijing-based technology consultancy. "China cannot just be an 'important' market - it must be your core market. China was never 'core' for eBay, despite rhetoric to the contrary."
Alibaba.com Corp.'s Taobao site leads the consumer auction market, with the company claiming 30 million [m] registered users and just under 70 percent market share. EBay had criticized Taobao's decision not to charge users transaction fees for three years beginning in 2005, but followed suit by dropping its own fees in January this year.
"For the last three years there has been intense competition between eBay and Taobao, and that has prevented our companies form cooperating. We have a very clear method for working together with eBay," said Porter Erisman, Alibaba.com's vice president for international marketing and business development, without elaborating on that method. "This should open us up for potential cooperation, where we have these obvious synergies but haven't taken advantage of them. We congratulate them, we've been expecting this for a while, and it's on to the next new phase."
The departure from stand-alone operations in China is eBay's third retreat from a major Asian market. In June, the company turned over its Taiwan operations to PC Home, and laying off most of its 40 employees. It had entered that market through acquisition of a locally-based online auction company in 2002. PC Home is also Skype's former partner in Taiwan.
EBay shuttered its Japan operations in 2002 after failing to gain traction or take market share from Yahoo Japan Corp.'s auction site. It operates neither a stand-alone nor JV site there, where Yahoo continues to dominate.
Whitman said of Japan, "it is a very interesting market long-term, but not someplace we probably want to invest right now."