PayPal Provides Statement on DHgate Split in China

DHgate dropped PayPal from its mobile and online website this month after a similar split with marketplace AliExpress last year. At the time, Reuters reported that PayPal was unhappy with AliExpress' rising consumer business on the platform, which was targeted at businesses sourcing goods from China, and said PayPal wanted to raise transaction fees for certain accounts.

A look at DHgate reveals that, like AliExpress, the marketplace allows U.S. visitors to buy in small quantities. It's possible that PayPal's split with DHgate was prompted by the same concerns over a rising consumer business and PayPal's fee structure.

PayPal released the following statement:

"While we do not provide specifics regarding our business partnerships, we can confirm that PayPal and DHgate are ending their business relationship and PayPal will no longer be a payment option on DHgate after August 6, 2012. After a thorough annual business review by PayPal, both companies have mutually agreed to part ways due to different approaches to achieve their respective business goals and standards. PayPal and DHgate wish each other the best as both strive to deliver safer, more secure and trusted experiences for their customers.

"PayPal remains committed to the China market. We believe we provide a strong value proposition for Chinese merchants of all sizes who want to sell their products to our global buyer base of 113 million active accounts in 190 markets worldwide. We are confident in our business prospects in China and have many plans and activities to sign up more Chinese merchants to use PayPal for their cross-border online transactions."