(Yicai Global) July 17 -- JD.Com's new subsidiary will only conduct online auctions, the Chinese e-commerce behemoth told Beijing Business Daily to quash speculation that it would set up an offline auction house.

Beijing-based JD set up the unit to broaden its range of businesses and supplement existing subsidiaries, it told BBD. Some believed that when the firm founded Guangzhou Jingdong Hanying Auction on July 12, with CNY5 million (USD726,500) in registered capital and veteran executive Zhang Qi as its legal representative, that JD planned to enter the offline auction sector.

The company is no stranger to web auctions, having already set up a similar site for judicial, treasure, customs, government and bankruptcy auctions that does not charge commission.

"[Alibaba's] Taobao founded an offline auction company to support its online auction business," Ji Tiao, a researcher at the Central University of Finance and Economics' Auction Research Center, told BBD. "Without the support of offline companies, Taobao or JD.Com's online auction business may not meet auction regulations."

China has over 8,000 domestic auction companies and auction house sales tallied CNY670 billion (USD97.3 billion) last year, down 8.6 percent from 2017, according to the national data system for auction industry management.

Editor: James Boynton