Paypal enters Japanese market -- without eBay

http://www.ctv.ca/CTVNews/SciTech/20100728/paypal-japan-100728/
Paypal enters Japanese market -- without eBay





In this April 22, 2009 photo, the exterior of
eBay offices in San Jose, Calif., is shown. EBay Inc. will release
quarterly earnings at the close of the market, Wednesday, July 22, 2009.
(AP Photo/Paul Sakuma)



TOKYO — PayPal, the online payment unit of Internet
commerce firm eBay Inc., is planning to break into the Japanese market —
the first time it has entered a region without eBay's powerful auction
business.



Acquired by eBay in 2002, PayPal in most markets relies on its parent
company's online auction behemoth for a steady supply of buyer and
seller accounts, plus the lucrative transactions and brand recognition
that follow. But in Japan, where eBay has been largely absent for eight
years, PayPal is starting from scratch in a mature market, and must ink
individual deals with retailers and shopping sites, as well as convince
users to sign on.



"We're very, very new, we have a very small share of the market, so
we still see great opportunities for Japan," said Andrew Pipolo, who
heads PayPal's operations in the country, told reporters at a press
conference in Tokyo



The auction company pulled out of Japan in 2002, conceding the
booming auction market to Yahoo Japan, which is still dominant in the
country today and operates independently from its U.S. namesake. It was a
rare defeat for eBay, which in 2007 announced a minor deal to let
Japanese shoppers access its items through Yahoo Japan's site.



But Pipolo said Japan remains attractive as the world's
second-largest online consumer market, with transactions totaling 6.7
trillion yen (US$76 billion) last year and expected to nearly double to
12.2 trillion yen (US$139 billion) by 2014.



The company hopes to sell itself to retailers as an easy way to
handle sales abroad, with over 87 million accounts worldwide and the
ability to deal in 24 currencies. PayPal also has a claims center where
clients can respond to problems abroad using Japanese.



He declined to provide specific targets for PayPal in Japan, saying
only that it aims to outgrow the market. He said the company has been
ramping up its presence in Tokyo, where it recently set up a new office
and now employs about 20 people. In February, PayPal said it plans to
double its staff in Asia to 2,000 by the end of the year.



Last week as eBay announced strong earnings results for the
April-June quarter, CEO John Donahue said he believes that in the next
few years the company's payments business will grow to be larger than
its online e-commerce sites.



The close ties between eBay and PayPal have angered some. Earlier
this year a group of eBay sellers in the U.S. filed a class action suit
over its policy of requiring them to use PayPal to handle their online
sales, which they said violates antitrust laws.