By Keith Regan E-Commerce Times
03/18/02 10:28 AM PT
EBay's international sales grew 27 percent in the fourth quarter to nearly $40 million,
showing that the auction site will look overseas to help it reach ambitious sales goals.
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For the second time in three weeks, EBay (Nasdaq: EBAY)
has moved to solidify its foothold in Asia, buying a stake in Chinese auction site
EachNet for US$30 million.
The investment gives EBay a 33 percent stake in EachNet, a three-year-old trading
community formed by two Chinese entrepreneurs. EachNet is based in Shanghai on the
Chinese mainland.
The investment in EachNet comes on the heels of EBay's
purchase of NeoCom Technology, a Taiwan-based
auction site. EBay picked up that site for $9.5 million in cash, plus future
considerations depending on how well the site performs.
Two for One
Together, the moves put EBay on the cutting edge of e-commerce investment in the Chinese
marketplace, where the San Jose, California-based auction giant has said overall
e-commerce revenue will grow by 12 times to $16 billion per year over the next four
years.
EBay, which between its Chinese forays quietly announced plans to exit the Japan
market, where it never gained traction against deeply entrenched Yahoo!, said it sees
enormous potential in the Chinese market.
"Our relationship with EachNet is an important step forward in EBay's strategy to build a
truly global marketplace," company CEO Meg Whitman said.
According to research firm IDC, China has 27 million Internet consumers, making it the
fifth largest online economy. With a population of 1 billion, the potential for long-term
future growth is alluring as well, according to analysts.
Have a Seat
EachNet said it has 3.5 million members who trade everything from apparel to real estate
on a person-to-person platform similar to EBay's.
EachNet was founded in 1999 by Bo Shao and Haiyin Tan.
Shao called Ebay's investment an endorsement of "the enormous potential of e-commerce in
China. We believe online trading will revolutionize how people buy and sell goods and
services in China."
In return for its cash investment, EBay will receive two seats on EachNet's board of
directors, which will be taken by Whitman and EBay's senior vice president of
international, Matt Bannick. The auction giant also will have the right to expand its
stake in the future.
EBay said this investment will have no material impact on its 2002 earnings.
Piling On
Other e-commerce companies also have targeted the Asia-Pacific market in recent weeks.
Both Priceline.com (Nasdaq: PCLN) and Travelocity (Nasdaq: TVLY), for example, have
announced plans to launch Asia ventures in the next
month.
EBay Makes Bid for Chinese Market Power February 26, 2002
In an effort to reach its target of $3 billion in revenue by 2005 and to expand its
international reach, EBay has been trying to establish itself in as many markets as
possible.
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