Online auction giant eBay has announced that it is to shut the Chinese version of its website.
In 2003, eBay bought Chinese auction website EachNet for $150 million (£76.5 million), after having invested around $30 million (£15.3 million) in the company already. In 2005, eBay invested another $100 million (£51 million) in the Chinese company to make the EachNet site bigger and better.
Despite the massive investments eBay has failed to reach a leading position in the Chinese market, despite the massive potential. eBay has now confirmed it is backing out of China, according to The Wall Street Journal .
Instead eBay is making another bid to enter the Chinese market by teaming up with Chinese web portal and wireless operator Tom Online . eBay is investing $40 million (£20.4 million) in the project, whilst Tom Online is putting in $20 million (£10.2 million). Despite this, Tom Online is to control 51 per cent of the joint company whilst eBay will own the other 49 per cent.
The joint venture would focus on the domestic online auction market, The Wall Street Journal reported, in a sign of a shift in strategy.
eBay China will remain online as a platform for Chinese merchants to sell to international buyers. Anna Lagerkvist