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Chinese E-Commerce Platform Poised to Go International, Could Be Threat to eBay

Chinese e-commerce juggernaut Alibaba Group Holding Ltd. is now building an international platform of its monolithic e-commerce portal, Taobao. This global version will appear in multiple languages, including English, but Englisb2ap3_thumbnail_alibaba.jpgh-speaking shoppers will have to continue to use a field guide to navigate the site in the meantime.

To understand the implications of this move, it's important to first take a look at eBay. The U.S. online retail platform was a major contributing factor to the $1 trillion of retail sales directly connected to e-commerce made in 2012. After all, by the end of 2012, eBay had a whopping 123.5 million active user accounts.

With all the online clout eBay has, Alibaba was still able to squeeze it out of China when it made its debut back in 2003.

Just last year, its some seven million merchants and 800 million shoppers transacted about $160 billion worth of goods.

In fact, Taobao is arguably the largest e-commerce operator in the world by sales. On November 11 -- the Chinese shopping holiday "Single's Day" -- it raked in $9.3 billion in sales. This is an impressive figure made only more jaw-dropping by the fact that it's double the West's 2013 Black Friday and Cyber Monday online sales combined.

Taobao functions a lot like eBay does, in that it's also a consumer marketplace for both buyers and sellers offering goods at either auction or fixed prices. What's more, Taobao also allows merchants to sell to consumers directly, and makes the majority of its profits off of merchant advertising, which means this new international platform will be a huge opportunity for U.S. advertisers.

Whether or not Taobao will become a digital force to be reckoned with remains to be seen, of course, but investors seem to be excited. Alibaba shares rose 3.2% -- or $3.50 -- to $112.32 after the news was unofficially announced.
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