China's Alibaba to use PayPal

The once rivals, eBay and Alibaba will finally be working together. Alibaba is one of China’s largest e-commerce firms. Formally, the two companies have been in a virtual feud over the growing $220 million e-commerce market in China. With it’s new service AliExpress, which is still in Beta, they have agreed to use PayPal as their customer merchant account.

Recently eBay has pretty much withdrawn from the Chinese market as it has lost more and more market share. This gives them at least a workable way to gain some business without going head-to-head with Alibaba, whose parent company, Tom Group is owned 40% by Yahoo, Inc.

Alibaba.com told Reuters this month that for fiscal year 2011 they expect revenue growth to accelerate as they expand their offerings. They already run China’s largest e-payment service AliPay and its largest online retailer Taobao. This seems like a win-win for two of the largest online e-commerce firms.

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