EBay Heads East

Whoever wins the auction fight (at which point, those fees are likely to head north again), China's impact on worldwide retailing is going to be astonishing. As with e-commerce in the United States, the Internet cuts out the middleman, turning China's 111-million-and-growing Netizens loose on the planet, each scrabbling for something that will move online.

The range of goods the Chinese mini-merchants are pushing is huge. The municipal "Online Job Garden" full of auction sellers (the garden is actually an office storage facility subsidized by eBay and the Shanghai government) has everything from portable plastic baby pools to a huge collection of sparkly, beaded purses of byzantine complexity. Microretailer Cai works inside, flogging, in addition to pig blankets, a crateful of fingerprint-detection locks for laptops ("Very popular with traveling businesspeople," he insists). Another merchant, who had quit his job as a marketing rep for a medical-supplies firm, says he had been auctioning part-time, "but I was making as much money as my salary, sometimes even more. So I decided to do it full-time." He says it seemed weird at first not to have an employer, but points out that "more and more people in China work from home-- it's considered normal now."

This isn't just a race to the bottom, or a new flood of dollar-store ephemera. China's young digital elites are enamored of Western culture. Fluent in American TV shows and movies, they wear the same clothes and listen to the same ripped-and-downloaded music. And they understand which higher-end goods will appeal to fashion-conscious kids in American suburbs. One afternoon in Shanghai, a group of young college graduates--each with his own eBay store--sits in an apartment crammed with racks of what appear to be high-quality knockoffs of Skechers shoes and North Face jackets. Dressed themselves in artfully distressed gray jeans and untucked English-cut shirts, the students look like any cluster of Asian youths you'd see knocking about L.A. They currently do the majority of their sales inside China, they say, but are trying to cultivate more foreign business.

"I actually prefer to sell to Americans and Europeans," says one 24-year-old in a cream corduroy jacket. "Because then you're sure the money will arrive! With Chinese, you never know," he chuckles. Asked how he markets to teenagers in the States, he grins: Google ads. "They do a search, and we turn up as one of the stores. They don't care where we are so long as we have the best prices."

The next switch to get turned on will be services. Imagine zapping a few dollars via PayPal to an interpreter in Beijing who will then serve as translator during your Skype conference call. (One blogger in Shanghai is already planning to roll out such a service.) Or how about hiring a professional-quality Web designer in Beijing to quickly assemble your Web site overnight while you sleep--or to touch up digital photos from your last family gathering? (Both of these, too, are in the works.)

Outside of the Sino garmentos' apartment, the streets of Shanghai are jammed with hundreds of scrappy local merchants in stalls hawking pirated DVDs, plastic electric guitars, silk ties, mobile-phone cards, oil paintings, live chickens. It's hard to think of a country where people work harder to cut deals, to shake something loose, make business happen. The idea of all of them swarming online is almost too much to contemplate. "The whole economy in the world is coming down to one common market," says James Zheng, PayPal's COO in China, "and China will be the low-cost provider to everybody."

Clive Thompson is a writer based in New York. His work has appeared in The New York Times Magazine, New York, Discover, and elsewhere.