Cross-Border Ecommerce Ventures Formed By Taobao And Yahoo! JAPAN Take Off

A couple of weeks ago, Yahoo Japan (Japan’s biggest website) and Taobao (China’s largest e-retailer) agreed to launch a cross-border initiative under which both services will link their online shopping services starting June 1.

Well, today’s that day.

Taobao, the largest online shopping website in China and a subsidiary of Alibaba, and Yahoo! JAPAN today began operating complementary online shopping services that connect Japanese consumers with Chinese merchants and Chinese consumers with Japanese merchants. Japanese consumers can now buy goods from Taobao merchants in China through Yahoo! JAPAN China Mall, a new website section.

In turn, Chinese consumers can buy Yahoo! JAPAN Shopping goods through the equally new TaoJapan website opened as part of Taobao. Consumers of both countries will be able to buy products available in the other country exactly in the same way as they normally shop from e-commerce platforms in their own country, bypassing the usual barriers such as language, laws, delivery logistics, and payment issues.

Sidenote: Yahoo Japan’s largest shareholder, telecom giant SoftBank, happens to own a 33% stake in Alibaba Group, Taobao’s parent company.

The initial service includes tens of millions of items on Yahoo! JAPAN China Mall and about 8 million on TaoJapan. Both companies intend to expand the number of products over time.

When the partnership was announced, Masayoshi Son, Yahoo! Japan’s chairman, said the combined transaction volume would represent 290 billion yuan ($42.5 billion – yes, billion) and 260 million users for both firms.

China’s search leader Baidu announced in January a joint venture agreement with Rakuten, a top Japanese online retailer, to launch a virtual shopping mall targeting the world’s largest online population. Rakuten also recently acquired for $250 million.

Clearly, the e-commerce market in Asia is heating up quickly, and eBay and Amazon better keep watching developments closely.