In the first quarter alone of this year online consumer to consumer auctions in China hit $674 million. More than half of that 57% belonged to Taobao.

eBay China has the same number of customers as Taobao but could generate only half of Taobao - 28%.

Taobao was first out of the blocks in China with commission-free auctions. And Taobao has twice the sales as eBay. So, why is Taobao sweating it?

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