Both companies declined to reveal any details of the venture, but confirmed that they will make a formal announcement on November 12.
Xiu.com is ranked as one of China’s top ten e-commerce vendors, but has only a 0.8% share of the market, according to industry analysts.
Earlier efforts to compete in China’s online retail market proved problematic for the Internet auction giant. After encountering competition from Alibaba.com, eBay retreated from the Chinese market in 2007, retaining only a minority stake in an online joint venture. But that website mainly assists Chinese vendors looking to sell products overseas.
With online sales rising fast in China, eBay is looking for a way to insert itself successfully in the market. However, Alibaba’s e-commerce platforms accounted for 80% of the Chinese e-commerce market last year, and analysts expressed skepticism over how eBay might fare again in a market so overwhelmingly dominated by an established player.