China's online auction market is brewing up a fierce competition. Renowned portals Yahoo and Sina will jointly launch a brand new website next month offering an online auction service for free. Yahoo's target? To surpass eBay's China venture EachNet, the mainland's No. 1 player. However, EachNet shows little worry over their rivals and says it won't stop charging sellers. 
 
As China's biggest online auction service provider to successfully survive the internet industry's disastrous period in the late 20th century, EachNet now virtually monopolizes the mainland's online auction market. It won about 90 percent of the business last year.

But the situation may change in a month, as the world's largest internet portal, Yahoo, has joined hands with leading Chinese portal SINA to explore this lucrative business, which is expected to double last year's scale to reach over US$400 million this year. One big reason is that, unlike EachNet, registered sellers on the new website don't have to pay fees.

Similar competition comes from another online auction carrier, Taobao.com. It is funded by home-player Alibaba.com and also provides free service to sellers.

Despite such challenges, EachNet says it won't give up its fee collecting policy. Bill Cobb is Senior Vice President for global marketing of the California-based eBay, EachNet's parent company.

"We actually think fees are important to the health and the vibrancy of the market place. By charging these fees, we can actually get legitimate sellers who are interested in selling their goods and put quality merchandize on the site rather than just putting a lot of junk upon the site. Our charges are actually moderate."

Sellers on EachNet have to pay several categories of fee, including registration fee, base price fee, and transaction fee.

But despite their apparent unconcern, one thing eBay EachNet cannot ignore is that a similar scene went on stage in Taiwan a month ago, when Yahoo decided to charge the sellers on its auction site Kimo. The number of listed items has now dropped by more than 50 percent.

EachNet has reportedly lowered its rates, but many sellers still complain that they are too high.

Will what we saw with Yahoo happen to eBay EachNet? We'll have the answer after June.

(CRI May 9, 2004)