Magazine article Newsweek

Asia Bound; as Growth Slows at Home, E-Commerce Giants like eBay, Amazon and Yahoo Look to China and Beyond

Magazine article Newsweek

Asia Bound; as Growth Slows at Home, E-Commerce Giants like eBay, Amazon and Yahoo Look to China and Beyond

Article excerpt

Byline: Karen Lowry Miller

In some ways, China is an unlikely hotbed for e-commerce. Only 38 percent of online buyers pay with credit or debit cards, using instead an army of bicycle messengers delivering cash. There are no reliable credit ratings, or postal services, so some online auction customers still want to meet the seller in person. Yet none of this deters America's e-commerce giants--Yahoo, Amazon and eBay. All are moving rapidly into China and the rest of Asia, driven by a rather startling fact of the digital age: the survivors of the Internet bubble in America are already mature businesses at home.

Consider: eBay is posting record profits, and Amazon is in the black for the first time in its eight-year history. Yet U.S. growth rates are starting to slow. This year eBay expects to post more sales outside the United States than within. The e-commerce market in Europe is starting to take off, but Asia has the biggest potential. Researchers at IDC forecast that annual Asian sales outside Japan will rise at 38 percent a year through 2007, topping 61 percent in China. William Cobb, head of eBay's international business, expects China to overtake Germany and the United Kingdom as eBay's biggest overseas market "sooner rather than later."

The population of Internet users in China is now 87 million, and growing fast. That explains the bidding: last spring, Yahoo teamed up with Sina.com, China's largest Internet portal, to break into the online auction business. …

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