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Mainland, Taiwan Net firms eye each other

Updated: 05 07 , 2013 19:39

Internet companies on both sides of the Taiwan Straits are looking at each other in the search for new markets.

The rekindled interest is expected to initiate the third wave of Taiwanese companies' search for opportunities in the mainland's Internet market.

On July 18 Obuy.co.tw, the third- largest e-commerce website in Taiwan, said that it had partnered with top mainland Internet portal Sina Corp to open an online shopping channel on Sina.

"In 2005, there were 1,500 shops in Taiwan selling products online and the good news to us was 750 of them were selling products through our website," said Candice Liu, president of eDynamics, Obuy's operator, in an interview with China Daily.

"But what is frustrating is that even if we already have half of them as our customers, the total is still just 1,500."

To expand its business eDynamics has decided to come to the mainland, where there are more than 123 million Internet users and over 3 million frequent online buyers.

The partnership with Sina is the second major co-operation between Internet companies across the Taiwan Straits in four months.

In March, Shanghai-based Ctrip.com International bought a minority stake in Taiwan counterpart ezTravel.com through its overseas subsidiary.

The two companies had already formed an alliance last May to tap the tourism market in Taiwan, as soon as people from the mainland were allowed to travel to the island province as tourists.

At present, the mainland is the top destination for Taiwanese holidaymakers.

Consultant Analysys International said in a research note that Ctrip, which sold 5.5 million hotel room reservations and 3.7 million air tickets last year, has been anxious to expand and smaller cities and overseas markets have become priority targets.

At the same time, ezTravel also wants a bigger share of customers in Taiwan to book hotels and air tickets through Ctrip, as well as Ctrip providing a stable future source of tourists.

Senior Internet analyst Lu Bowang said the four-firm co-operation could start a new wave of Taiwanese companies to the mainland, eager to benefit from the rapid growth of the Internet market.

So far there have been two such waves one in 2000 and 2001, when Chinese Internet portals were publicly listed on the NASDAQ exchange in New York, catching the eyes of many overseas investors. The other came in 2003 and 2004, when computer game developers came to the mainland, where online gaming was becoming a huge success.

"The charm of the Internet market in the Chinese mainland is hard to ignore," said Lu.

The mainland has the second- largest Internet population after the United States and the largest population of people under 35 years old.

And mainland Internet companies such as Ctrip, online game operator NetEase and search engine Baidu have been bright stars on the NASDAQ.

Ben Tsiang, senior vice-president of Sina Corp, who was one of the founders of Sina's business in Taiwan almost 10 years ago, said it was natural for companies from Taiwan to look for opportunities in the mainland's Internet market.

"You can easily tell who your competitors are and how big the market is in Taiwan, because it is so small, compared with the mainland," said Tsiang.

Jimmy Yiu, chairman of eDynamics, said the competition between US online auction giant eBay's Chinese arm and Taobao.com, now partly held by Yahoo!, greatly stimulated people's interest in online trading.

He said prosperity in online trading usually followed the growth of online bidding, so the stiff competition between auction houses signalled that it was a good time for Internet companies to come to the mainland.

"If we do not come at this time, we may miss the opportunity," said Yiu.

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