By Guan Juanjuan

Ebay China and Taobao.com have expanded their intense competition from the customer-to-customer (C2C) market to the business-to-customer (B2C) market. Both have launched online stores in cooperation with dozens of premium brands.

In China’s emerging e-commerce market, Ebay China, the Chinese unit of US online auction service eBay Inc, and Taobao.com, a unit of Alibaba.com, have been long-time rivals.

In the latest survey available, Taobao.com had a 67.3 percent share of China’s C2C market in terms of user numbers by the end of March 2006. That was followed by Ebay China which had a 29.1 percent share of the market.

Now the battlefield between these two arch rivals has been expanded to the B2C market.

In early May, Taobao.com set up online shopping stores which have attracted companies such as Motorola, Nokia, Qingdao Haier, and Lenovo.

As always, Taobao.com does not charge any fees to companies who want to set up shops on its website. Nor does it take commissions from any deals that have been successfully completed.

Ebay China has quickly followed suit by launching its own online shops in cooperation with 70 popular international and domestic brands in China, including Philips, Epson, Disney, TCL, and Adidas.

Unlike Taobao.com, Ebay China has several strings attached to its cooperation with other companies.

First, any company who wants to launch a shopping service on Ebay China’s website has to agree to make available on the site at least 70 percent of all the types of commodities the company sells. Secondly, the companies must have a sound and equitable customer service. Thirdly, prices must be lower than those obtained in traditional shops.

In an interview with the Beijing-based The Economic Observer newspaper, Ebay China’s chief executive officer Wu Shixiong says online shops are Ebay China’s specialty and he plans to make them account for half of the total trade volume at Ebay China by 2007.

Jack Ma, the Chief Executive Officer of Alibaba.com, the parent group of Taobao.com, is not so optimistic. He told the Economic Observer that with quality distribution and logistics channels, Amazon.com only achieves a profit margin of 5 percent. In Jack Ma’s opinion, China’s B2C market is already mature and it will be hard for companies to make further profits.

Meanwhile, reports say Taobao.com is trying out some new methods. One move includes auctioning the best positions on its website to interested companies. Companies can bid for the best position to sell their products on Taobao.com.

Most companies believe the move marks the beginning of charging companies for listings on the websites.