Alibaba told AuctionBytes it welcomed competition after a report surfaced that the Chinese search engine firm Baidu has begun beta testing an ecommerce site. Alibaba spokesperson Christina Splinder said competition would help grow the entire ecommerce market in China.

Splinder said the consumer ecommerce penetration rate in China is 33% compared to over 90% in developed economies like the US. "It was the early competition from eBay that helped us grow China's e-commerce market from several hundred million RMB back in 2003 to over 100 billion RMB this year. And we expect the next wave of competition will help grow the market to 1 trillion RMB in the near future."

Splinder referenced three factors she said were needed to deliver the best online shopping experience to consumers: "A comprehensive product selection (We have 200 million items on Taobao's marketplace); a trusted platform (Taobao has a successful consumer protection program as well as user rating system in place); and a safe and easy online payment system (We have Alipay)."

Referring to the article that reported Baidu's plans, Splinder said it was not true that Alibaba had veered away from small businesses to cater to larger customers. "Alibaba.com and Taobao have always been focused on serving entrepreneurs and small businesses, and they make up the majority of our membership base. Most of the transactions that occur on Taobao are C2C transactions, not B2C transactions."

Splinder said Taobao would compete as it has against eBay and Paipai (Tencent's ecommerce offering) "by offering the best online shopping experience for consumers. We believe that ultimately it is consumers who will decide where they want to shop."

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