EBay launched a new e-commerce business in China with a local partner on Monday, marking the company's re-entry into an ultra-competitive market that once eluded its grasp. But this time, the company is focusing on a smaller market segment with a site geared at selling popular clothing brands to consumers.
The site, called eBay Style, leverages the company's existing services by promoting popular clothing brands already offered on eBay.com. Supporting the site is partner Xiu.com, a Chinese online clothing retailer that will manage its sales, logistics and customer service.
EBay has seen a 40 percent year-over-year increase in products bought by Chinese customers frequenting its English-language site, said Melanie Tan, vice president for the company, in a statement.
The company's previous attempt to expand into China a decade ago, with what was then an auction-focused site, failed to withstand the competition brought by Chinese Internet giant Alibaba Group, which now dominates the country's e-commerce sector.
In the meantime, China's online retail market continues to grow. Last year, the country's business-to-consumer (B-to-C) space reached 240.1 billion yuan (US$38.2 billion) in total annual transaction value, a year-over-year increase of 130 percent.
"In some respects, there is a clear market for them there," said Mark Natkin, the managing director for Beijing-based Marbridge Consulting. Due to eBay's already growing customer base in the country, the launch of the new site will help open the company's services to users who can't speak English or don't possess an international credit card.
In addition, Chinese users are looking to buy quality international brands they know are genuine and not fake, Natkin said. The site for eBay Style prominently states that all its products are real, and that the shipments come from overseas.
But as before, eBay faces tough competition in the country's e-commerce market. Alibaba Group's Tmall.com had a 45 percent share of the B-to-C market in the third quarter, while many other well-known rivals including Amazon's China business, had a market share of less than 4 percent, according to Beijing-based research firm Analysys International.
Xiu.com itself is a small player, and eBay's new partnership with the company is unlikely to turn its new business into a major e-commerce destination, Natkin said. Alibaba's Tmall.com site also sells clothing from international brands, he added.
"It's not going to unseat Alibaba Group," he said. "It might be able to take a couple percentage points of market share."