Two reasons are cited. First, eBay, which had as much as 90% market share in China for C2C transactions, has lost significant market share to upstart (and free) rival Taobao. eBay is now left with just less than 30% market share for C2C transactions, even after moving to eliminate transaction fees in China a few months ago.
Second, China is preparing new regulations limiting foreign ownership of companies operating online payment systems. After looking unsuccessfully for a partner on its Chinese PayPal service, eBay faces significant regulatory problems.
This comes on the heels of the departure of eBay China’s CEO, Martin Wu. PayPal China’s GM, Liao Guangyu, will take over Wu’s job.
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