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Friday, September 01, 2000
In September 1999, Chennai - based Cyber Commerce Private Limited, an associate of Cybernet Software Systems, Inc. USA, launched a website that forever changed the way industrial products were bought and sold.
The hard-core e-commerce industrial auction site - www.auctionindia.com - is the first site of its kind in India.
Often Indian companies sell off industrial assets such as machinery, plant or even the complete factories and business. The sale is publicised, bid for and purchased through tenders or auctions.
Often interested buyers may miss out on good deals and the enterprise is sometimes unable to find a buyer for the stock.
AuctionIndia seeks to bridge this gap between sellers and prospective buyers through the site. The sellers list the products that they wish to auction off on the site, with complete descriptions, at least a month before the auction date.
The site then hold the auction on a fixed date and time and bids can be received either through the computer or through traditional methods like sealed tenders, faxes and even phone calls.
If the bid is received through a sealed tender, the tender document gets opened on-line and auctioning proceeds after the floor price gets determined on the highest quotation.
The Internet auction will be kept open for a few days and the bids received so far will be listed on the site.
The highest bid will also be available on the site at anytime. Prospective buyers can request the site to bid on their behalf up to a specific value that they can choose. The transaction is easy to use and the site even provides a demo option for new users.
Cyber Commerce ensures, through legal contacts, that products put up for auction cannot be pulled off the website after the process of auctioning begins.
The form can be downloaded from the net, filled and mailed to the company to signify assent. A display period is allowed and the seller can choose to pull out if he contracts a buyer before the auction process.
Similarly, the buyer would have to pay into an escrow account if he is the highest bidder. The escrow account acts as an insurance against bad payments.
If the buyer does not fulfil this obligation, the second highest bidder is selected, who will have to pay into the escrow and so on. In case of sale of large plants, pre-qualified bids are admitted.
The Company is negotiating with ICICI Bank and Indian Bank to provide the escrow facility.
Cyber Commerce has tied up with Industrial and Technical Consultancy Organisation of Tamil Nadu (ITCOT) for the Southern regions to act as the appraisal agency.
ITCOT can, upon request of the buyer, inspect the goods physically and come out with an independent evaluation, which could help the buyer negotiate a better deal. The report will remain confidential with the buyer.
While the site deals in general product auctions, its core area is in "investment asset recovery" - helping clients to sell expensive assets.
Banks with enormous amounts of Non Performing Assets are a focus area. Typical products at the AuctionIndia virtual warehouse include general engineering and hydraulic machinery, cam grinders, lathes and drills.
Apart from the normal auctions, AuctionIndia also offers procurement solutions through reverse or purchase auctions.
Here buyers list their requirements and different firms bid for supply of the equipment. Buyers are thereby ale to source their demands from a number of suppliers at prices that have been competitively driven down.
The site allows easy search facilities for a particular type of machine in various industries, for buyers to choose. It has been tailored to Indian conditions where connectivity is a problem.
The site uses an auction software that has been developed by Cybernet Software Systems and caters to all industries. It uses sophisticated data mining mechanism to match buyers with sellers through the site. For this, it invites companies to list their offers and prospective buyers to list requirements.
AuctionIndia uses its nation-wide sales and marketing network to ensure that offer listings are translated into actual deals.
They have so much faith in the effectiveness of their product that they charge the service fee (as a percentage of the value of the deal) only after the deal is complete. The listing remains completely free.
AuctionIndia allows the site to be used as an auction platform for other e-businesses also. This solution helps companies focus on their core business activities while outsourcing auctions and other related activities to AuctionIndia.
AuctionIndia will provide the auction software, design auction pages that complement the site's current design, and ensure smooth implementation of the auction. Sites like autopartasia, a Chennai based automotive component portal are using this service.
The site has also tied up with AFL limited - a logistics services company the operates for DHL World-wide Express business in India - to ensure that equipment and other assets transacted through the site, can be transported easily across the country.
AuctionIndia crossed the Rs.1 crore mark in deal making in its first three months of operations. Contributing to this landmark was the 27- lakh deal that it concluded for BHEL, reported to be the single largest Net deal in the country.
With clients include Ashok Leyland, Blue Star, India Pistons, TI Diamond Chain, WIDIA, Birla Periclase, Godrej & Boyce and BHEL, already under its belt the company expects to earn a revenue of Rs.5 crores in three years. |
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