Online auctions are taking off in China with the increase of people coming online and total online transaction. A report recently released by Alibaba gives us a glimpse of some facts behind China’s booming online auctions (in Chinese).
According to the online auction report, Beijing, Shanghai, Hangzhou, Guangzhou, and Shenzhen are the top five cities that have shown greatest enthusiasm for online auctions.
Jade and jewelry, luxury goods, tea, wine and tonic, ink painting and seal carving, as well as real estate, remain the most popular categories of online auctioning platforms. Luxury items such as watches, bags, accessories, and designer clothes remain the most sold items.
In terms of bidders, post-80s aged between 26 and 35 have become the main force of online auctions. Unlike online shopping where women buy more, men are the “hand-choppers” (local slang referring to shopaholics who buy so much online that they would like to chop their hands off to resist the urge to buy) in online auctions. In Beijing, 64% of bidders were men, while the percentage is 90% in Tibet, 71% in Guangdong province, 69% in Jiangsu and Zhejiang province, and 66% in Shanghai city.
Looking at the broader picture, we can see online auctions are attracting more people to an increasing number of auctions in a wider range of areas, compared with traditional offline auctions which are more of a niche space with a limited number of bidders.
Online auction platforms have given China’s rising wealthy class easier access to novel and interesting auctions, while the nouveau riche, in turn, have propelled the country’s online auction business grow at an amazing pace.
Apart from auctioneers which have their own online auction services on their official websites, major e-commerce players such as Alibaba, JD, and Suning have launched their own online auction business as well. There are also some auction verticals, such as ArtTact (大咖拍卖; targeting artwork auctions), Cheyipai (车易拍; targeting user-car auctions), and Jupai.net (聚拍网废; targeting waste and old materials auctions).
Among those online auction platforms, Alibaba’s Taobao has been leading the way in terms of auction sales. According to data from the China Association of Auctioneers, Taobao’s auction platform represented over half of the estimated RMB 20 billion in the country’s total online auction sales in 2013. Even though we don’t have any statistics since then, it gives us a peek into the status of Alibaba’s online auction business in China.
When Alibaba first launched it’s Taobao online marketplace in 2003, it adopted eBay’s auction business model, before shifting in 2006 to a C2C model whereby online vendors sell new items mainly at fixed prices instead of through auctions. It wasn’t until 2012 that the e-commerce giant revitalized its online auction business, which Alibaba believes will be the next big market for e-commerce. Online auctions may represent 30% of China’s e-commerce in the next five years, estimated Alibaba vice president Sun Jungong at an online auction-themed summit in May.
Alibaba’s online auction business encompasses judicial sale, asset auctions, car and house auctions, treasure auctions and others. If you can think of it, there is nothing that cannot be bought on the almighty Taobao. From stakes in listed companies to sour debt, from yachts to real estate, all are traded on the Taobao auction platform every day.
Taobao’s auction platform witnessed the highest price on record for a single sale on China’s e-commerce arena last year when creditor’s assets of a yacht club were sold for a hammer price of RMB 2.5 billion (in Chinese).
Taobao, together with JD.com, is among the five online platforms authorized by the Supreme Court last November to provide judicial sale services online. It is worth nothing that the transaction volume of judicial auctions on Taobao online auction platform topped RMB 100 billion last year, representing nearly one-fifth of the country’s RMB 519. 23 billion total auction sales in 2016. In contrast, British auction house Christie’s sold 4 billion pounds (approx. RMB 32 billion) of art and collectibles last year.
As of this mid-February, Taobao’s judicial sale platform has partnered with more than 2,000 courts in 30 provinces and municipalities, reveled a report entitled China Online Judicial Auction Development Report (in Chinese).