eBay are to return to the Chinese online auction market, Meg Whitman has said. The new “Tom eBay”, a joint venture with local media company Tom Group, is within a few months of going live.
In order to strengthen buyer confidence, all transactions will use an escrow service, a third party which holds the buyer’s payment until the seller has delivered satisfactory goods. This is presumably the source of the story about Paypal pulling out of China: there are not yet any details of who the escrow provider would be, but a local company would seem the best bet. In addition, sellers will be more carefully vetted, and restrictions on the sale of luxury goods will be in place. “Whatever we do elsewhere to assure trust and safety, in China we have to do more,” said Whitman.
This is the second phase of eBay’s hokey cokey dance with China. The first venture, Eachnet, folded at the end of last year. On the flip side, Skype’s growth in China is their fastest of any country, and they now have more Chinese than American users.