Taobao, the online auction unit of China's e-commerce giant Alibaba Group, on Wednesday announced the parent company would invest in it 5 billion yuan (US$732 million) over the next five years.

Taobao president Lu Zhaoxi said the investment showed its confidence in the long-term Internet development and economic growth in China.

Online shopping was predicted to be a basic demand of Internet users in the future, and to build a bigger and more open platform was Taobao's strategic goal, said Lu.

China's online shopping market reached 56.1 billion yuan last year and was estimated to gain 125.1 percent to 126.3 billion yuan in 2008, said an iResearch report. It added that the market would continue to post rapid growth in the coming years and would likely reach 569 billion yuan in 2011.

The largest consumer e-commerce company in China said it would continue to offer free services to online buyers.

Taobao pursued free services since it was established in 2003 and in 2005 it promised another three-year free services. The strategy helped it beat eBay to become the nation's largest online auction site.

Its Chief Operating Officer Zhang Yong disclosed the company's profit patterns, including banner advertisements and paid shop management services. The company, which has 850,000 active online shops, would continue to explore new patterns next year, said Zhang.

Taobao achieved a cost and revenue balance in August, said Zhang, adding he was confident the company would make a profit in 2009.

Alibaba was established in 1999 and headquartered in Hangzhou, east China's Zhejiang Province.

Alibaba.Com Limited, the listed arm of Alibaba Group, reported net profit of 970 million yuan last year, an increase of 340 percent over 2006.

(Xinhua News Agency October 9, 2008)