Yahoo Japan And China's Taobao Announce Cross-Border E-Commerce Tie-Up

Big news from the Asian web world today. Yahoo Japan (Japan’s biggest website) and Taobao (China’s largest e-retailer) have agreed to launch a cross-border initiative under which both services will link their online shopping services starting June 1. Through the tie-up, Yahoo Japan and Taobao merchants will be able to sell products to buyers in each other’s markets.

For that purpose, Yahoo Japan will launch a so-called China Mall in its shopping section, carrying about 50 million products from China (in Japanese language) right from the beginning. Taobao plans to initially offer about 8 million products from Japan-based merchants on “TaoJapan”, a Chinese-language section on Taobao’s homepage.

Sellers and buyers are said to notice not much of a difference, as they will continue to list products, handle sales and pay for purchases just like they used to and in their native languages (product information will most likely be machine translated).

Rumors about negotiations between Yahoo Japan and Taobao first came to light early last month, and both companies sure have the power to pull this off. Yahoo Japan Shopping is the country’s second biggest e-commerce platform, while Taobao’s 190 million registered users generated a transaction volume of a whopping $29 billion last year.

And both companies already have a close, albeit indirect, relationship. Yahoo Japan’s largest shareholder, telecom giant SoftBank, happens to own a 33% stake in Alibaba Group, Taobao’s parent company. Under the e-commerce tie-up, Alibaba subsidiaries in Japan and China are expected to manage functions like cross-border shipping, payment settlement, cloud computing services etc.

E-commerce players like Amazon or eBay should be looking closely at what was established in the world’s largest and third largest Internet market today. At the news conference announcing the Yahoo Japan-Taobao partnership in Tokyo, SoftBank President Masayoshi Son said the future marketplace will be visited by some 260 million people, which – according to him – will make it the world’s largest by potential customers.

And in January, China’s leading search engine company Baidu and Japan’s biggest e-commerce platform Rakuten announced plans to invest $50 million in a giant virtual shopping mall that is scheduled to go live later this year. Expect a lot more cross-border activity in Asia’s e-commerce sector in the near future.