Global online auctioning giant eBay Inc will increase investment in its Chinese subsidiary EachNet, in a bid to lure more of the nation's consumers into the world of "cybershopping."

Meg Whitman, chief executive officer of the San Jose-based firm, said: "China is becoming a leading player in global e-commerce, and Chinese consumers are quickly learning how to make online trading work for them."

"We're very pleased with the growth of EachNet and plan to further invest in its development," she told a Beijing press conference.

She refused to disclose the exact investment in EachNet - soon to be renamed eBay EachNet, which was snapped up by eBay in June last year for US$180 million, making it the firm's largest single investment so far.

EachNet had 4.3 million registered users in China at the end of last year, making it the nation's largest online auctioneer. It traded items worth a total of US$124 million last year.

Although EachNet is still struggling to get out of debt, Whitman expressed confidence in the market's long-term growth potential.

China's netizens now number almost 80 million, of which 7.3 percent often purchase online, according to the China Internet Network Information Centre.

China's e-commerce sector will grow fourfold by 2007, faster than the global average, with China becoming eBay's biggest market over the next 10 to 15 years.

But eBay is not the only foreign online auctioneer that is upbeat about the Chinese market's prospects.

Fellow US firm Yahoo! announced on Tuesday that it was on track to launch online auctions in China by mid-2004.

Whitman said that facing this competition in China it would not repeat its failure in Japan, where eBay was edged out by Yahoo!.

"The lesson we learned is that getting to a market first is crucial. In Japan, we came 6 months later than Yahoo!," said Whitman.

"But in China, EachNet came first. It is the best since 1994, and it will maintain this position."

As the first firm to enter the market, it is much easier to gather enough traders to conduct transactions, as well as to build up a good reputation, said Whitman.

"Competition in the market is good for us because it will introduce more customers to online trading," said Whitman.

But critics continue to cast doubt on whether eBay will succeed in China by collecting fees from sellers, while smaller auction websites do not do so.

Sellers will be charged between 0.1 and 8 yuan (1.2 to 96.7 US cents) for listing each item on the EachNet website, with additional fees being paid if the transaction is finalized.

Whitman defended its fee-charging policy by saying that the payment helps filter junk information and therefore increases the odds for successful transactions.

Customers would be more like to pay a small fee and see 50-60 percent of listed products sold, rather than paying nothing but sell just 5 percent, claimed Whitman.

(China Daily April 15, 2004)