Alibaba Group’s Taobao Marketplace is expanding its online auction business to include overseas real estate and to help streamline the way repossessed property and other distressed assets are disposed of in China.
Taobao officials say they are now seeking partnerships with a broader range of organizations including banks, customs agencies and financial management companies, offering them a way to leverage the reach of the Internet to create efficient national markets for additional types of hard-to-value assets including repossessed real estate, financial claims such as uncollected debt, intellectual property, machinery and forestlands.
A dozen or so organizations have recently joined Paimai, including China Merchants Bank, China Citic Bank, Industrial Bank Co. and several government agencies, according to Taobao. Also among them is Tianjin Financial Assets Exchange, an electronic trading platform set up in 2010 by China Great Wall Asset Management Corp. and the Tianjin municipal government to help financial institutions dispose of assets they have acquired because it was used as collateral for loans that later go bad. The exchange, the first of its kind to officially register with the Chinese government, currently lists as items open for bidding repossessed homes, jade pendants, antiques, Chinese paintings and other goods.
Tianjin Financial Assets Exchange’s tie-up with Taobao gives it greater efficiency and marketing clout, said Hu Yu, manager of the exchange’s transaction technology division. In the past, bidders were required to show up in person at local service centers to register, place deposits and bid for assets. Taobao’s online trading platform allows bidders to bid over the Internet regardless of their location.
“Originally, the finance assets exchange market only involved a small group of participants,” Hu said. “Now we are able to reach the large user base of Taobao.” The arrangement will help to establish “a more trade-driven financial market, which benefits both investors and fundraisers, and eventually finance agencies and the entire industry.”
Hu added that Tianjin will initially concentrate on selling offreal estatethrough Taobao. Over time—after users “get a better idea” of the platform’s operation, he said—the exchange plans to expand into sales of corporate equity, intellectual property such as brand names, and financial claims.
Separately, Taobao this week announced the Paimai platform plans to auction off overseas properties that are being listed byseveral Chinesereal estate companies. During Taobao’s upcoming 12.12 online shopping promotion slated for Dec. 12, more than 70 properties in eight countries will be on the block, Taobao said.With an estimated combined value in excess of $32 million, the real estate includes a villa in Houston, Texas, a furnished apartment in Auckland, New Zealand and two parcels of raw landin theCayman Islands.
