Online auctions grow in popularity, profitability

Yahoo-Kimo Taiwan (雅虎奇摩), the nation's largest Internet portal, is forecasting a five-fold increase in online auction sales this year over last year, an executive of the company said yesterday.

"We are expecting to generate over NT$10 billion in online auction sales this year, while last year the figure was only NT$2 billion," said Charlene Hung (洪小玲), a marketing director at Yahoo-Kimo.

The company announced yesterday that its June merchandise sales are up 12.5 percent over May, hitting a record-high of NT$900 million.

Hung also boasted that it has attracted more than 1 million users and has over 2 million items on its site.

"Yahoo-Kimo Auction is successful because we have the critical mass that can basically [allow users to] find whatever they need," she said.

One market researcher did admit local acceptance of online shopping is on the rise.

As of the first quarter this year, some 15.2 percent of the nation's 8 million Internet users said they shopped online, up 3 percent over the same period last year, according to AC Nielsen's NetWatch report released in April.

"We saw a significant growth since the beginning of the year," said Desmond Wang (王道平), communications manager at ACNielsen Taiwan.

"[We] expect to see even stronger growth [in this area] in the second and third quarters," he said.

Hung attributed the developments to the impact of the SARS epidemic.

"Many users stayed at home to avoid SARS between April and last month, so we attracted many new users during that period," she said.

Head-to-head competition between Yahoo-Kimo and eBay Taiwan also stimulated awareness.

"A series of TV commercials from these two companies has successfully caught the public's attention," Wang said.

Early last month, eBay Taiwan launched its first TV commercial boasting that users can find whatever they want via eBay's online marketplace where 68.8 million users worldwide exchange items.

"It is a very successful campaign ? we saw a 10-fold user number increase after the TV commercial ran for two weeks," said Angel Cheng (成葆齡), public relations manager at eBay Taiwan.

She refused to disclose detailed figures.

Not to be outdone, Yahoo-Kimo yesterday introduced a TV commercial, stressing "Yahoo-Kimo has many more items listed than eBay Taiwan."

"Currently Yahoo-Kimo posts more than 2 million items [in its auction site], nearly 12-times more than eBay Taiwan's 172,000 items," Yahoo-Kimo's Hung said.

This isn't the first time the two US-based ventures have squared off overseas. EBay entered Japan in 2000 at a time when Yahoo-Japan was dominating that country's e-commerce market. After a two-year battle, eBay in March last year decided to pull out of Japan.

Last week eBay said it was still searching for ways to re-establish itself in Japan -- a market that's important in its plans to increase its business internationally, according to eBay chief executive Meg Whitman.