Source: CNN
Online commerce remains a relatively small market in China, but some of the world’s leading Internet companies are betting that is about to change. The biggest Internet investment in China from a foreign company to date came from Yahoo Inc., which is paying $1 billion in cash for a 40 percent stake in China’s top e-commerce firm, Alibaba.com.
Yahoo will merge its China subsidiaries into Alibaba, which runs a Web site that matches foreign buyers with Chinese wholesale suppliers, plus the popular consumer auction site Taobao.com, which competes with the Chinese subsidiary run by eBay Inc.
“This is Yahoo getting much bigger in China,” Daniel Rosensweig, Yahoo’s chief operating officer, said at a news conference in Beijing with Alibaba founder Jack Ma. Rosensweig said the alliance creates an entity with assets to compete across the full range of Internet businesses — online commerce, e-mail and search engines.
Tsai said online sales are expected to grow 80 percent annually over the next three years. Yahoo and its Asian partners are now major forces in online auctions in China, Japan, Taiwan and Hong Kong, said Porter Erisman, Alibaba’s vice president for international relations. “This is really probably the knockout blow for eBay in China,” he said. “This is going to make it hard for eBay to win in Asia.”