eBay sets up Asia HQ in Korea, sees robust growth

PUSAN, South Korea (Reuters) - eBay Inc will set up its Asian headquarters in South Korea, its fourth-largest market, from January to spearhead a drive into its fastest-growing region, executives said on Wednesday.

The decade-old US online auction giant, whose 168 million global users buy and sell everything from classic cars to farm gear, picked the web-crazed country because it yields over three-quarters of eBay's Asian revenue and sits between two other crucial regional markets: China and Japan.

"We feel we are at just the beginning of what could be an enormous business for us," chief executive Meg Whitman told reporters on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit in the port city of Pusan.

Asia provides about a third of eBay's non-US users and a third of its international gross merchandise value, or the value of goods bought and sold outside the United States, executives said. "We expect that to continue to grow," Whitman added.

Ten years after the auction site was founded by a Silicon Valley programmer, growth at eBay continues to rocket as it expands beyond auctions into shopping, property rental and, with its US$4 billion purchase of Skype, web-based phone calling.

The California-based firm has set its sights on expanding in Asia, where it already has 30 million users. eBay racked up US$1.1 billion in revenue in the third quarter, of which nearly half came from Asia.

The firm launched its PayPal online payments system in China in July, and is spending US$100 million there in its largest investment in a single country in 2005.

Though it has signed up about 15 million users in the world's seventh-largest economy -- 1 million more than in South Korea -- the Chinese business still pales against that of Korea, which generates 77 percent of eBay's Asian revenue, executives told Reuters.

And competition is getting tougher.

Both Yahoo and Google have invested in or bought internet firms in China, some of them auction sites.

Over 30 percent of South Koreans have an eBay Auction Co account, executives have said, and e-commerce there is expected to double to 19 trillion won (US$18.4 billion) by 2010.

Whitman declined to forecast growth for Asian markets. But executives have said transaction volume was expected to jump more than 30 percent in China this year.

"The geographical location is just perfect for us," Whitman said.