EBay, Alibaba eye partnership strategy in China

Saini Sa'aB

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EBay, the owner of e-commerce sites and the PayPal payment service, sees partnerships, even with former rival Alibaba Group Holding, as the best way to generate sales from China, rather than going it alone in the world's biggest internet market.
PayPal is being increasingly accepted by China partners looking to expand international sales, including sporting goods maker Li Ning, EBay Chief Executive Officer John Donahoe said in an interview in Hangzhou, China yesterday. Alibaba announced in April it would accept PayPal on AliExpress, its product- sourcing marketplace.
EBay is counting on PayPal and partnerships with local companies to help it expand revenue from China after failing to gain a local foothold to compete against entrepreneur Jack Ma's Alibaba Group. Helping Chinese companies connect with customers in other countries will boost eBay's export volume from China more than 80 per cent to $4 billion (Dh14.7 billion) this year, Donahoe said.
"EBay tried to apply its global playbook in China without customising it or localising it and that was a mistake," Donahoe, 50, said. "We're partnering with local Chinese companies, whether they be payment companies, commerce companies. That's the best way that we can proceed in the domestic Chinese market."
San Jose, California-based eBay first entered China in 2002 under the leadership of former CEO and current California gubernatorial candidate Meg Whitman. Competition from Taobao.com, Alibaba's auction business, saw eBay's market share decline by half and it shut down its site in 2006.
Benefits
"US internet companies have had difficulty entering the China market due to both political reasons and cultural differences," Galant Ng, a Hong Kong-based internet analyst at Tai Fook Securities, said in an interview. "They may have to use something other than a direct approach. Maybe strategic partnership is the way. Alibaba is a good strategic partner."
Donahoe joined eBay in 2005 as president of its Marketplaces unit from Bain & Co., where he was worldwide managing director. He became CEO in March 2008
 
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