BEIJING -- Yahoo! Inc. and leading Chinese Internet portal SINA announced an agreement Wednesday to form an auction service for online buyers and sellers in China - a project to unite people and markets in a country suddenly bursting with privately owned goods.
The deal aims to marry SINA's brand awareness in China and Yahoo!'s proven expertise in e-commerce, the companies said. Financial terms weren't disclosed, though the companies said both auctions and fixed-price sales would be offered.
"The number of Internet users is growing. They're getting more sophisticated. They're a middle class with fairly decent income," said Allan Kwan, north Asia managing director for Yahoo!
"This accumulation of wealth and goods clearly forms a good base for transactions," Kwan said.
The world's largest online auction purveyor, eBay Inc., does not operate in mainland China, though it put $150 million into a 5-year-old Chinese auction site, EachNet, last year.
Hurst Lin, chief operating officer of SINA, said he expected the site to go online by the middle of this year. He said customer support would be extensive - a necessity, he said, in a country where people aren't accustomed to trading goods and conducting transactions online.
"This market is not as mature as in the States or Western Europe. There's going to be a little bit of learning, a little bit of cultural difference," Lin said.
About 78 million of China's 1.3 billion people are Internet users, according to new figures from the China Internet Network Information Center. That number is growing rapidly - both as interest grows and more Chinese can afford computers.
The companies' announcement dovetails with the Chinese government's encouragement of the Internet as a business development tool. Authorities, however, maintain tight controls over citizens' access to news and sites that purvey political views.
The companies will also offer a platform to speed payment transactions.
Yahoo is based in Sunnyvale, Calif. China-based SINA operates three businesses: Sina.com for online media and entertainment, Sina Online for consumer, fee-based online and wireless information services, and Sina.net, offering small and medium-sized enterprises information services.
The companies said they expect the first wave of buyers and sellers to focus on consumer electronics and women's clothes and accessories - "things with short product life cycles" that can be sold when consumers want to upgrade, Kwan said.
Less immediate, executives predicted, will be the robust market for antiques and collectibles that has contributed to the success of sites like eBay. The simple reason: The notion of a spending class is new to modern China, and the market for such paraphernalia is still in its infancy.
"Given that the economy of China has just recently taken off, I don't think there's much junk in the attic of that many Chinese families," Lin said.