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Tue Aug 24 2010 16:29:42

Alibaba Acquires eBay Solutions Provider Auctiva

By: Ina Steiner

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Alibaba will acquire eBay solutions provider Auctiva, the company just announced. Alibaba had acquired Auctiva rival Vendio in June. Terms were not disclosed, but Alibaba said in June it had a total budget of $100 million to invest in Aliexpress.com.

The Chinese online B2B marketplace said it would use the acquisition to encourage Vendio's small-medium businesses to source product from China by integrating with the AliExpress.com website.

It will be interesting to see how Alibaba will consolidate Vendio and Auctiva's tools. I especially wonder what eBay thinks of its Chinese rival now owning two important third-party vendors and having access to rich data about its sales and its sellers.

UPDATE: AuctionBytes spoke to Alibaba.com CEO David Wei about the Auctiva acquisition, see Wednesday's Newsflash article.

Here is today's official press release.

HONG KONG, August 24, 2010 – Alibaba.com (HKSE: 1688.HK) (HK.1688), the world's leading e-commerce company for small business, has entered into an agreement to acquire Auctiva, the leading third-party developer of tools for eBay (NASDAQ: EBAY) sellers. With more than 170,000 active users, Auctiva provides a variety of listing, marketing and management tools as well as image hosting and online storefronts that make it easy for small businesses to sell successfully via e-commerce on sites like eBay.

The acquisition of Auctiva, as well as Alibaba.com's purchase of Vendio in June, combined with Alibaba.com's strength in sourcing, will create a significant source of tools and resources for U.S. small businesses looking to leverage e-commerce.   The combination of both the Auctiva and Vendio acquisitions brings more than 250,000 new customers to the Alibaba.com family of products, and significantly expands the size of Alibaba.com's U.S. operations.

Through its recent acquisitions, Alibaba.com is building the world's first global e-commerce supply chain. This end-to-end network connecting manufacturers and wholesalers with e-tailers and consumers will allow small businesses to easily source from suppliers all over the world, then conveniently manage and sell those products through popular online channels like eBay, Amazon (NASDAQ: AMZN), their own online storefronts and more.

"Time and money are the two most important things to me as a small business owner," said Don Pinard, owner of www.peggsbargains.net, an Auctiva and AliExpress customer. "I spend a lot of time online looking for products I can sell. I used to use liquidation sites, but AliExpress is much better, and more reliable. If I can trim the cost of purchasing items by just 7% that will cover all store fees and shipping costs, which will really increase my profit."

The online merchants who use both Auctiva and Vendio will have direct access to almost 1.5 million supplier storefronts on Alibaba.com's sourcing platform and AliExpress (www.aliexpress.com), a wholesale transaction platform operated by Alibaba.com. This new connection from supplier to online merchant represents significant potential cost savings to customers.  By sourcing their products directly from the manufacturer, reducing travel and taking advantage of global markets, Alibaba.com hopes to help small merchants increase their profit margin in the long term.  For example, a jewelry retailer can sell a silver bracelet with black agate stones for US$12 on eBay and make a profit of US$7.09 if he/she originally purchased their inventory on AliExpress for US$4.91 per piece.  These savings combined with the additional efficiencies of sourcing online will represent significant savings for the average online merchant.

With the acquisition, Auctiva's platform will be integrated with AliExpress, allowing Auctiva users to connect to AliExpress via a tab on the Auctiva Web-based platform. This will enable customers to easily search for suppliers, acquire merchandise and list those products on eBay through their Auctiva accounts. Exclusive promotions and special deals on AliExpress products will be available to Auctiva users.

"Small online retailers are just starting to see how they can use international sourcing to their advantage, and we have seen the significant opportunity through customer reaction to our initial integration with Vendio," said David Wei, chief executive officer of Alibaba.com. "Many small business owners never even thought that they would be able to source their products from overseas, as they didn't have the staff or technological resources to do so.  We are bringing both sides of the equation together to make international sourcing as easy as possible for any business."

"Our mission has always been to help users sell more successfully online, particularly through the eBay channel," said Jeff Schlicht, founder and CEO of Auctiva. "With more than 10,000 new users joining Auctiva each month, we are constantly looking for new ways to serve our customers and drive value for them. Joining Alibaba.com and connecting our buyers to the vast supplier base on Alibaba.com and AliExpress.com is the perfect way to help them grow and thrive in an increasingly competitive environment."

The acquisition closed on Aug. 18, 2010, and is part of the US$100 million investment plan for AliExpress that Alibaba.com announced in April 2010. Auctiva will operate as a new business unit within Alibaba.com and will retain its own brand name and operations.

Rothschild was the financial adviser to Alibaba.com for this transaction and Morgan Joseph was the adviser to Auctiva for this transaction.  Financial terms were not disclosed.




Comments (37) | Permalink

Readers Comments

Alibaba Acquires eBay Solutions Provider Auctiva   Alibaba Acquires eBay Solutions Provider Auctiva

by: Troglodyte

Tue Aug 24 17:36:22 2010

Donahoe's going to need some household hints about yellow stain removal.

More genius from stagnant and rotting ebay management think.

Alibaba Acquires eBay Solutions Provider Auctiva   Alibaba Acquires eBay Solutions Provider Auctiva

by: Stanley Tules

Tue Aug 24 18:04:06 2010

Whenever someone realizes that they're in a hole that's over their heads... any rational person would STOP DIGGING!

However, this doesn't seem to be the case with eBay. They keep digging and digging and digging. Surely they know the company is in trouble, yet Donorrhea has everyone convinced that if they just DIG a little further, they'll find the treasure they seek.

There's no treasure at the bottom of that hole... it's just dirt, dirt, and more dirt.

As eBay declines, others like Alibaba move in to fill the void, or... more likely, to go in for the kill.

In due time, Alibaba will make a hostile takeover of eBay. Not only is Donorrhea setting everyone ELSE up for certain failure, he's all but guaranteed the same fate for eBay.

Meanwhile, my Bonanzle sales grow... my personal web store sales grow... and this month's eBay invoice was the LOWEST EVER!

Alibaba Acquires eBay Solutions Provider Auctiva   Alibaba Acquires eBay Solutions Provider Auctiva

by: RicRoe

Tue Aug 24 18:46:43 2010

Alibaba's recent acquisitions may just be the reason that eBay has announced they will discontinue third party checkout.

Alibaba is giving eBay and John Donahoe a dose of their own medicine by acquiring third party providers that are deeply ingrained inside eBay's marketplace.

This is much the same treatment that eBay gave to Craigslist.

Hopefully, the Alibaba acquisitions of Vendio, and Auctiva combined with Rakuten's acquisition of Buy.com will bring eBay management to their senses, and they will begin to reexamine the methods they have employed which have denigrated their own buyers and sellers.

It is almost like Alibaba and Rakuten are picking at eBay's bones  before the victim is dead.

Maybe the secret Donahoe 3 year plan is to see eBay's marketplace sold off to the highest bidder, and the anti seller tactics have all been done  to make the transaction more appealing to a new ownership group.

Will eBay sell itself? If so, will there be a bidding war, or will the transaction be a fire sale caused by the steadily deteriorating base of buyers and sellers.

Has current management really been this inept? Or have they been executing a plan designed by a party interested in acquiring eBay after they have cleaned house.

Is the handwriting on the wall?

If or when they announce eBay and PayPal will be split into different companies, then it will be clear that the past three years have been about preparing eBay for a sale to new ownership.


Alibaba Acquires eBay Solutions Provider Auctiva   Alibaba Acquires eBay Solutions Provider Auctiva

by: another side of the coin

Tue Aug 24 19:07:45 2010

Just to add a little food for thought .. maybe JD has been collaborating with Alibaba from the get go. IMO JD is either a sociopathic fool or a puppet, both? It's hard for me to believe he could get away with all this destruction for so long without there being more to this. Welcome to the United States of China or ChinAmerica.

Alibaba Acquires eBay Solutions Provider Auctiva   Alibaba Acquires eBay Solutions Provider Auctiva

by: Digby
Web Site

Tue Aug 24 19:41:02 2010

I repeat Obamas three words.
"Made in America".

You can't keep buying stuff from China or you'll all be working at the dollar (yuan) shops.

Alibaba Acquires eBay Solutions Provider Auctiva   Alibaba Acquires eBay Solutions Provider Auctiva

This user has validated their user name. by: Tula

Tue Aug 24 19:55:41 2010

I checked out AliExpress last month, looking for sources for some products I wanted to source for my business. I didn't find any bargains, though, since shipping and freight costs negated any cost savings I might have gained over buying retail, even in very large quantities. In fact, I can buy retail a lot cheaper in some instances.

Now, this may only apply to certain categories, but I wasn't impressed and certainly couldn't make any profit with the pricing I saw. A lot of the descriptions were very vague, too, so I would be leery of dealing with those vendors.

I tried to find US sources on there, but there were few to be found. Kind of sad.

Alibaba Acquires eBay Solutions Provider Auctiva   Alibaba Acquires eBay Solutions Provider Auctiva

by: buck efay

Tue Aug 24 21:49:07 2010

I wish penicillin could cure Donorrhea! LOL
Oh mighty genie Alibaba, make my wish come true & buy Ebay & throw all the Great Disruptors Idiotvations out!

Alibaba Acquires eBay Solutions Provider Auctiva   Alibaba Acquires eBay Solutions Provider Auctiva

by: anoymous

Tue Aug 24 21:50:58 2010

guess I will have to consider if I want to stay with Auctiva after my plan expires. The Chinese are very nice people, but their government has no qualms about computer hacking / espionage and I do NOT trust ANY Chinese / Hong Kong company with ANY of my personal data, especially my financial data.

Alibaba Acquires eBay Solutions Provider Auctiva   Alibaba Acquires eBay Solutions Provider Auctiva

by: buck efay

Tue Aug 24 21:53:14 2010

Tula, the new trend is to buy American. Even the big corporate pigs are starting to snuffle around in the USA now, because the Commies want to raise their standard of living, and once you factor in shipping, it's reaching the tipping point. A book that costs .75 to make in China costs about .83 cents made here right now. And for the extra .08, you will be keeping jobs in OUR country. And probably saving people from toxic effects from Chinese trash.

Alibaba Acquires eBay Solutions Provider Auctiva   Alibaba Acquires eBay Solutions Provider Auctiva

by: Ebay Say it Ain't So

Tue Aug 24 22:45:37 2010

Neither acquisition is a strong ecommerce winner. If Alibaba wants to waste their cash reserves on Vendio or Auctiva so be it. I don't see either acquisition as being much of a threat to Ebay or anyone else for that matter. No I am not an Ebay fan but neither acquisition will help Alibaba much in the US market. Not sure why Alibaba would want either company.

Alibaba Acquires eBay Solutions Provider Auctiva   Alibaba Acquires eBay Solutions Provider Auctiva

by: buck efay

Tue Aug 24 22:49:49 2010

Data mining on millions of transactions? Access to past customer's information to offer them Alibaba services? Just on that basis alone. And a name known to many sellers here already? At least they are buying companies that relate to their core business. More & more I don't see Alibaba buying an Ebay, they can build something better & without the hate everyone feels for failbay.

Alibaba Acquires eBay Solutions Provider Auctiva   Alibaba Acquires eBay Solutions Provider Auctiva

by: another side of the coin

Wed Aug 25 00:02:15 2010

Remember Meg's Trip to Chinaland? How about looking at all your labels or even any part - bet it's made in China. How much does our goverment owe now to China? billions? trillions? How many items on eBay are from China? No Touchy China! Sure they will buy eBay regardless of what it is now and just a shell of it's former self. Doesn't matter China will make eBay into anything they want.

Alibaba Acquires eBay Solutions Provider Auctiva   Alibaba Acquires eBay Solutions Provider Auctiva

by: Smitty This user has validated their user name.

Wed Aug 25 00:29:04 2010

@ another side of the coin

You apparently don't fully understand China USA relations. Please search You Tube for obama china snl.

That should bring you up to date.

Smitty

Alibaba Acquires eBay Solutions Provider Auctiva   Alibaba Acquires eBay Solutions Provider Auctiva

by: Smitty This user has validated their user name.

Wed Aug 25 00:31:14 2010

To those of you who are not too familiar with Alibaba and its CEO Jack Ma, please let me point out a few things.

Some years ago Meg decided to invade the China market but without anyone on her staff who knew what they were getting into. The funniest thing I remember from that attempt was this quote from Jack Ma.

''Ebay may be a shark in the ocean, but I am a crocodile in the Yangtze River. If we fight in the ocean, we lose--but if we fight in the river, we win.''

The end result of that adventure was ebay having to tuck its tail between its legs and make a hasty retreat. I fairly sure it cost ebay in excess of one billion dollars. Just one more of Meg's great moves.

I have been of the opinion, and for a fairly long time, that Mr Ma took a good bit of personal offense at ebay trying to invade his turf. As a longtime Vendio customer, I did take note of Alibaba's purchase. I thought of it as a positive.

This latest purchase of Auctiva comes as no surprise to me.

Nobody should be surprised when Mr Ma makes his move on ebay itself. I will welcome it and this will show you why.

This from a 2009 AuctionBytes Story.

''Ma talked about his experience in building Alibaba from a small team in Hangzhou and building it into a company of 12,000 employees, with plans to hire an additional 5,000 this year. He said that at Alibaba, the customer is number one, employees are number two, and shareholder are number three. (The customers pay you, the employees stay with you, but the shareholders - ''they are all gone when disaster comes.'')

''The customer is number one''. That's us folks. The sellers who pay the fees. That is why I'd like him to take over ebay.

The current ebay management thinks the non-paying users (buyers) are number one, and that is exactly where they have gone wrong.

Let me close this overlong post with one more quote from Jack,

''Everything (MBAs) say is right, but everything they do is terrible.''

Smitty





Alibaba Acquires eBay Solutions Provider Auctiva   Alibaba Acquires eBay Solutions Provider Auctiva

by: nobody

Wed Aug 25 00:32:24 2010

"In 2005, Meg Whitman said, "Whoever wins China, will win the world" as eBay invested $100 million in China. eBay lost to Alibaba in China, and five years later, it is Alibaba's turn to invest $100 million in the U.S. as it acquires two major eBay
vendors in the last three months"

I'm sorry, this just made me LMAO!

Oh, will the never ending not-so-brilliant, but throughly arrogant, cocky and STUPID remarks from meg whitman ever end?

Me thinks not! LOL

First of all, YES, I agree with Digby "Made in the USA" or put it back on the shelf at walmart. I realize the price may be less there at that exact moment, but in the long run it costs our country 100 (maybe in the 1000's) FOLD from all of the JOBS lost HERE in the USA.

C'mon, you guys remember when we actually used to MANUFACTURE things, thus creating JOBS and a STABLE ECONOMY.
(those vacant, empty, abandoned factories contry wide, we need to get OUR people EMPLOYED again!)

Outsourcing is a LOSE-LOSE for ALL of US!

California, if you vote her in, after seeing first hand what she did to ebay, God help you.

Poor old tired auctiva, they screwed themselves.
(with the "help" of ebay)

Alibaba Acquires eBay Solutions Provider Auctiva   Alibaba Acquires eBay Solutions Provider Auctiva

by: Smitty This user has validated their user name.

Wed Aug 25 00:51:28 2010

@ nobody

All my garments come from allamericanclothing.com . I only buy American union made clothing.

Smitty

Alibaba Acquires eBay Solutions Provider Auctiva   Alibaba Acquires eBay Solutions Provider Auctiva

by: ebay nonsense

Wed Aug 25 02:04:35 2010

@ Ric Roe,

Isn't that what Bain people did, cut, shred, downsize and sell it off and scurry to the next company with their golden parachute in hand.

I posted here last year that if anyone was big enough to buy ebay it would be Jack Ma. Maybe he's got his eye on it as his next acquisition and maybe you're right that it's been the JD/Bain plan all along.

At least Mr. Ma understands that the one who pays you is your customer and should be treated with respect. JD must have skipped class the day they taught that in school.

Alibaba Acquires eBay Solutions Provider Auctiva   Alibaba Acquires eBay Solutions Provider Auctiva

This user has validated their user name. by: Siobhan

Wed Aug 25 02:16:56 2010

Atta boy, Smitty. Before I retired I worked at union garment shops. Now I sew all of my clothes. Except my undergarments. If I could find sewing patterns for bras and underwear, I'd buy them and make them too. But there in vintage sewing pattern sites and you very rarely find some available.

Alibaba Acquires eBay Solutions Provider Auctiva   Alibaba Acquires eBay Solutions Provider Auctiva

by: ma

Wed Aug 25 02:30:26 2010

Do you think Mr Ma can fix the page hang up and slow rolling pages in auctiva so one can list in less than 25-45 min per item. and maybe fix the item condition issue.. grrr. I left vendio because they lied.. sure hope the same wont come of auctiva..
of course I have less items and lowest ebay bill EVER in 10 years and Bonanzle is doing great.

Alibaba Acquires eBay Solutions Provider Auctiva   Alibaba Acquires eBay Solutions Provider Auctiva

by: Rich

Wed Aug 25 02:53:41 2010

Ebay should have been the one buying them.  They also should have bought buy.com. Instead Ebay spends their time and resources punishes sellers and chasing buyers and senders to Amazon.  1 more reason to leave Ebay--the Chinese are coming--bad news--

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