eBay gains against Yahoo in Taiwan

02 Nov 2006

A new eBay Inc. auction joint venture in Taiwan is gaining on market leader Yahoo Taiwan Inc. by offering no-fee trading, but the company faces a long fight to topple the island's largest Web auction site.

Since opening the beta version of the joint venture between eBay and PCHome Online Inc. in late September, http://www.ruten.com.tw/, the site has attracted hundreds of new auctioneers who aren't happy with higher fees Yahoo is charging.

As of Oct. 12, the number of items listed on Ruten had reached 1.2 million. That figure is only about a third as many as Yahoo Taiwan, but it's rising fast. In the four days from Oct. 8 to Oct. 12 alone, Ruten added over 100,000 items.

'Everyone's moving to [Ruten] all at once,' said Yora Yang, who auctions women's clothing at her Yahoo store. She's been trying to set up another store at Ruten, but 'every time I use the site, I get a pop up saying 'network busy.' It makes me mad.'

The early success of the new site in attracting local auctioneers is an example of how quickly users can adjust to issues such as unwanted fees, and use the Internet to create new opportunities. Yahoo Taiwan had initially backed down from a new 3 percent fee on all sales, delaying implementation until September. Now that auctioneers are paying, many are looking to Ruten as an alternative since the site isn't charging any fees.

Yang said the new Yahoo charge adds to the NT$4 (US$0.12) per item she already paid, in addition to money for advertising, making it more expensive to sell clothes on the site.

Yahoo reckons the auctioneers will stay onboard because of its huge audience of buyers, their familiarity with its auction process, and the high level of service it provides, according to Charlene Hung, vice-president of e-commerce at Yahoo Taiwan.

Yahoo Taiwan holds over a 57 percent share of the local Internet auction market, according to researcher ACNielsen Corp., and buyers don't have to pay any fees on the items they purchase.

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