 Classifieds |  Post and  Browse ads from various other categories |
|
|  | Business India
You are here:Home > Press > Business India
|
November 15-28, 1999
Auction sites such as e-Bay have been making waves in the new, exciting world of e-commerce. Indian Internet startups have been quick to jump onto the bandwagon. One of the first companies ready with an Internet auction site is Chennai based Cyber Commerce Private Limited, an associate of Cybernet Software Systems Inc. of the US. The company claims that its recently launched website is the first ever for auction and sale of industrial assets such as machinery, plant or total factories and businesses. Co- promoter C E Karunakaran says: "Today the options open to any business that wishes to sell its surplus or used machinery or other kinds of assets are limited to advertising in general and niche publications. Some even try physical auctions and locally brokered deals. But none of those fetch the desired realization, as information flow to the most fruitful targets is rarely achieved."
In this scenario Karunakaran, a former Managing Director of a consultancy company promoted by banks and financial institutions, saw a business opportunity and launched AuctionIndia, to bridge the gap by measuring efficient communication between the holder of an investment asset and its most suitable user. "Internet auction helps prices find their true market value by reaching a wider audience," says R. Shiv Kumar, Vice-President of Cybernet Software Systems Inc. Along with C.K. Thomas and Shiv Ramani, Kumar founded the three year old Cybernet. AuctionIndia currently offers free listing to buyers and sellers of industrial assets. They are encouraged to provide detailed information and where necessary, even photographs.
Karunakaran says the response has been encouraging. "Within a few weeks as many as 500 machines and dozens of total manufacturing lines and business were put up for sale on the website." AuctionIndia has identified its target clientele. Besides large corporates and SMEs, the promoters are wooing banks, FIs, and government agencies. The recovery cells of banks and FIs have to dispose assets and liquidations. Similarly, government agencies have been adopting the traditional tender-cum-auction method for disposal of used machinery etc. "We are convincing them that these can be supplemented by online auction, which can ensure higher recoveries, besides speed, convenience, and space and time flexibility.
"There are several advantages," explains S. Ragothaman, formerly with ICICI and now a consultant. "A prospective seller can provide only limited information in a print advertisement, unlike in an Internet auction. The website, with a proper database, can cut down the transaction time by providing answers to queries simultaneously." The site, which is in its nascent stage, facilitates a negotiated sale between buyer and seller. The process begins with the submission of details by the prospective seller. AuctionIndia vets the offer, checks the seller's antecedents, and verifies the details just to ensure credibility and quality of service. Once the offer is posted on the website, prospective buyers can express interest in an asset and seek further details. AuctionIndia acting as a mediator between the buyer and the seller brings the two parties together for closure of the sale.
AuctionIndia charges up to 5% of the sale price as a "performance fee". "It was really simple," says K. Raghavendran of Venu Engineering services. "I recently bought a grinding machine from Bangalore at a reasonable price. The main reason I could see was the ease in identifying the machine I wanted and the choice in pricing. Of course, I did not need to interact with any brokers in between." Soon, the company will be launching full-fledged auctions. "We have a proven auction software developed by our associate Cybernet Software Systems which is already being used by a San-Jose based auction company to sell used laboratory equipment," says Karunakaran. This will allow competitive bidding and the site could even bid on a client's behalf up to a predetermined value. With the bid history and the current highest bid available on the screen, the auction conducted by the computer is entirely transparent. Also, to ensure that only serious bidders are in the fray, AuctionIndia will specify pre-qualification norms wherever necessary.
Another problem is that, unless the site attracts buyers, sellers won't be inclined to put their assets up for sale on it either. It is the classic chicken and egg proposition, because buyer interest depends on the number of sellers who are putting assets up for sale on the site. Moreover, the auction market for industrial assets comprises hundreds of vertical markets, which are divided along the lines of industry/segment. AuctionIndia is aware of these problems and is confident that it will tackle these problems along the way. In fact, Karunakaran is so upbeat that he's already talking of breaking even in three years.
|
|
.gif)
Search