SHANGHAI, CHINA: China's largest online retailer, Taobao, will launch a mobile phone in partnership with Lenovo Mobile to tap into rising demand for mobile shopping, a person familiar with the situation said on Friday.

The phone, which will be preloaded with Taobao applications, will enable users to shop wirelessly and will be launched within a month, targeted at the Chinese market, the source said, speaking on condition of anonymity because the plan is not yet public.

Lenovo Mobile is the former cellphone unit of Lenovo.

A spokesman at Taobao had no comment. Taobao is owned by Alibaba Group, which is 40 percent owned by U.S. search titan Yahoo Inc. Alibaba Group is also parent of China's largest e-commerce website Alibaba.com.

China's rollout of third-generation mobile technology this year has opened the floodgates for developers and mobile phone makers to cash in on mobile banking and mobile shopping opportunities in the world's largest mobile user market.

China's online shopping industry grew 90 per cent in the third quarter from a year ago to transactions worth 65.9 billion yuan ($9.64 billion), according to data from research firm iResearch. Taobao had 82.8 per cent of the market.

Taobao, which does not charge listing fees for users wanting to sell their items on its auction site, said in September its 2009 sales are expected to more than double from 300 to 400 million yuan.

China's domestic consumer spending has remained resilient during the global economic downturn as Beijing's massive stimulus spending has helped to sustain income growth.