Wharton chimes in on e-Auctions (in China)

April 6th, 2007 at 08:11am David Bush - Iasta

I ran across this article from the Wharton Knowledge Center regarding the technology of e-Auctions. Although the focus of the article is on consumer forward auctions, I found a couple things interesting from the conceptual level.

1. The Chinese are starting to really embrace the concept of auctioning for goods and services. 30 million people conducted auctions in 2006, an increase of 250% over 2 years. This is consistent with what we see on the corporate side of reverse auctions. Bids that took place 3-4 years ago with Chinese suppliers were like playing Roulette, almost completely unpredictable. Now, Chinese suppliers are much more educated on what they are doing and rarely are problems experienced with lack of training or comprehension of the process and intent.
2. The Chinese have quickly learned that a perfectly level playing field is the only way to have an auction succeed for both parties. They have instituted measures like credibility scores, properly managing the reserves and defining all the specs have all increased the likelihood of the auction ending successfully.

“The biggest shortcoming of online auctions is information mismatch,” says Zhou Lian, one of four scholars at Beijing University who recently wrote a paper titled, “The Value of Reputation: Evidence from Online Auctions.”

It doesn’t matter where you live, following best practices in any e-Auction are going to easily forecast if it will work.

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Entry Filed under: General, Reverse Auctions, Supply Management Best Practices, Technology