Ebay and Alibaba eye China US partnerships

eBay CEO said the company will not compete with Alibaba in the China market

Two of the world's biggest e-commerce marketplaces, eBay and it's Chinese counterpart Alibaba, will explore online partnerships that could help their users in China and the U.S., the heads of both companies said on Friday.

The two have often been seen as rivals, vying to control the markets in their home countries and abroad. But during a forum sponsored by Alibaba, chief executives with both companies say they can achieve more by leveraging each others' advantages.

"Today our focus in China is not to compete in the domestic market," said eBay's CEO John Donahoe, during a speech at the event in the Chinese city of Hangzhou. "What we're trying to do is connect you, the Chinese sellers, with consumers around the world."

"I think we should work together for tomorrow. There is a huge opportunity," said Jack Ma, CEO of Alibaba Group. "If we compete too much, it will not be good for the small business."

The companies see two cross-country benefits: eBay says it can help Alibaba by connecting its Chinese sellers with consumers in America. At the same time, eBay believes that their own online merchants can work through Alibaba by connecting them with low-cost Chinese manufacturers to create their products.

Companies under Alibaba Group's include Taobao, China's largest online retail website, and Alibaba.com, the country's leading e-commerce operator for small businesses. This year Alibaba.com made two acquisitions in America, buying up Vendio and Auctiva, both third-party developers of eBay tools for online merchants.

The deal was meant to pave the way for more online merchants in the U.S. to source their products from China through Alibaba.com. But it also served as a wake up call for eBay in how Alibaba aims to expand its services globally, said Alibaba.com CEO David Wei.

"I think Jack and John have confirmed that both businesses from now should seriously explore how to make this happen: how to create value, how to create value to both companies' customers," Wei said.

Both CEOs of Alibaba and eBay acknowledged during the forum that they have been labeled as competitors. But the two companies have shown cooperation in the past. Alibaba.com's AliExpress, a website for smaller retailers to source products from suppliers, allows users to pay using eBay's PayPal service. More than one million Chinese sellers have signed up with PayPal.

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