China EBay Rival to Sell Merchant Tools in 'app Store'

Chinese auction site Taobao.com has launched a download store for applications that help buyers and sellers use its service, a move it hopes will generate additional revenue.

Taobao, owned by China's Alibaba Group, recently released a programming tool to help third-party developers make applications for its auction site, and will now start selling those applications through a dedicated app store site. Taobao will split revenue from sales of some apps with developers, who will also be able to make money from ads and from app subscriptions.

The store adds a new and potentially significant source of revenue for Taobao, which does not charge listing or transaction fees for auctions, although it does get revenue from advertising on its site.

The apps will mainly target PC users at first, but there will be some for mobile phones. The company is calling its download site the Taobao App Store, adding it to the ranks of companies seeking to emulate the success of Apple's App Store for the iPhone and iPod Touch. Apple, which also splits sales revenue with developers, has reported more than 3 billion downloads from the store.

Taobao, like eBay, lets users buy items at auction or directly from seller pages. Apps in its store will, for instance, help buyers compare prices and other features of items on sale, recommend items to shoppers or help sellers manage their inventories.

Chinese shoppers routinely visit Taobao to buy items like laptops, mobile phones and clothes. Transaction volume on the site reached 200 billion (US$29 billion) last year and the company expects that number to double this year.

Taobao each year will invest 10 million yuan ($1.46 million) in independent developers making apps for its service, it said. The first batch of investments will be awarded to developers who made the top 30 apps in a recent contest, and their apps will be the first available in the store.

Taobao has announced three mobile phones that will carry the site's logo and be preloaded with software related to the site.

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