eBay Invests in China To Advance Global Cross-Border eCommerce

eBay signed a new deal in China to set up a filiale (or we would say subsidiary) in the Fujian Pilot Free Trade Zone.

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This is eBay’s first cooperative agreement with the government of China and is the company’s second subsidiary in the country, following Shanghai.

As part of the expansion, eBay also made a deal with Linca Industrial (Fujian) Group Co., Ltd. to build a cross-border eCommerce industrial park in Fuzhou.

The park will be the first industrial park in the capital of east China’s Fujian Province with a full industry chain to focus on cross-border eCommerce in China.

It is the result of a proposal from last April between by Fuzhou City government, the Department of Commerce of Fujian Province and eBay.

The first stage of the park is about 30,000 square meters (322,917 square feet) of development including a logistics center, business incubators, talent training center, payment service support center, and other related business services.

“Fujian sellers have always been active on eBay and offering a rich variety of products with quality services,” said John Lin, chief executive officer of eBay Greater China.

“The landing of the industrial park showed our firm faith in the huge potential of cross-border eCommerce in Fujian. We hope we can work together with local government to bring more companies and products from Fujian on eBay, and further on help them reach more consumers across the globe.”

eCommerce Institute

An eBay cross-border eCommerce institute was also established on the same day. Jointly organized by the Fujian Pilot Free Trade Zone, eBay, and Fujian Business University.

The institute features two majors, eCommerce, and international trade, along with other optional courses.

Graduates will receive a certificate from eBay and offered opportunities to work at premier eCommerce companies in Fujian.

The institute is estimated to enroll about 2,000 to 3,000 eCommerce students that move on to jobs in the Fujian region.

“We hope to stimulate the potential and vitality of Fujian, which has always been a major province of export trade, and nurture a demonstrative policy environment and ecosystem for cross-border eCommerce industry in China,” said Liang Yong, deputy director of the Fujian Pilot Free Trade Zone.

China is a growth market for eCommerce. The success Alibaba has in the country shows the middle-class consumer in China is embracing online shopping in record numbers.

But this particular venture is about eCommerce cross-border trade. According to a study by Accenture and Alibaba, China eCommerce cross-border trade volume may reach $994 billion by 2020.

That is a significant portion of the current overall trade volume of all goods and services which the WTO places at over $4 trillion. And eBay is directly investing into this industry.

eBay Motives?

One does wonder a bit about eBay’s motives here. Why are they getting into the supply chain business in China?

Chinese goods infiltrating the eBay marketplace is nothing new. The company continues to try to distance itself from other marketplaces like Amazon by stating that it doesn’t compete with sellers.

But, by investing into production and logistics infrastructure in China and training people to build out eCommerce companies to compete on a global scale, it seems they are not just a marketplace, but actively involved in developing cross-border trade from China.

In turn, this could mean more competition for US and European eBay sellers that are already complaining about subsidized postage shipments and cheap goods from China.