Taobao Seeks Pricing Battle With eBay

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The next battle in China for the eyes and wallets of Internet users there will be over online auctions.

Jack Ma and Meg Whitman have engaged in a war of words via their respective PR departments over auction services in China. The exchange draws eBay into another competition with Yahoo for auction users.

Taobao, Alibaba’s auction site in which Yahoo picked up a 40 percent chunk over the summer, dropped a statement to the media about an hour before eBay announced its third quarter financial numbers.

Ma has lived up to his reputation as a fierce competitor in the marketplace, and his challenge isn’t much of a surprise:

“We call on eBay to do what’s right for this phase of China’s e-commerce development and make your services free for buyers and sellers in China,” Ma said in a statement.

“Cutting prices is not enough — it’s time to make your services free and affordable for all of China’s entrepreneurs and consumers. Free is the right business model for China’s current conditions.”

For the next three years, Taobao auctions will be free to buyers and sellers. Taobao competes with EachNet, China’s largest online auctioneer, which was acquired by eBay two years ago.

EBay scoffed at the ploy in a statement it release in response:

“Free” is not a business model. It speaks volumes about the strength of eBay’s business in China that Taobao today announced that it is unable to charge for its products for the next three years.

We’re very proud that eBay is creating a sustainable business in China, while providing Chinese consumers and entrepreneurs with the safest, most professional, and most exciting global trading environment available today.

David Utter is a staff writer for WebProNews covering technology and business. Email him here.

Taobao Seeks Pricing Battle With eBay
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  • http://www.google.com/notebook/public/10523265162948004673/BDSHDQwoQ8ZTTmKIj Busch

    Wonderful, informative article!

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