THE ONLINE AUCTION MARKETPLACE

The market

• US internet auctions are popular and the market has shown considerable growth
• key US players are looking to expand their businesses in the UK
• UK-based QXL is the key European player at present
• traditional UK auction houses are setting up online auctions
• portals and classifieds sites are incorporating auction elements into their sites, and so are newspapers, particularly in the US

Trends

• business-to-consumer and person-to-person auctions are popular, but business-to-small business auctions are beginning to increase
• IT-related goods, collectibles and memorabilia are currently popular, and car and property auctions are expected to grow in popularity
• the number of auction sites is increasing rapidly and the sophistication of such services is continually evolving

Legal issues

• there is a lack of enforceable legislation in place to protect those participating in internet auctions
• escrow services which act as a trusted third party can limit the risk consumers take
• problems with fraudulent goods have emerged and sites now specify that vendors are accountable for their lots

Successes

• Yahoo! claims that its auction activities are profitable
• Auction Universe has 35 ?entry portals? in place
• QXL is expanding at a significant rate in the UK and Europe

The future

• internet auctions will form a key part of e-commerce activities
• auction sites will continue to gain credibility with businesses and consumers
• an increasing number and diversity of web sites will offer auction services to users
• auctions will move beyond limited technology product offerings to a more diverse product and service mix
• business-to-consumer auctions will move $3.2 billion worth of merchandise annually by 2002 (Jupiter Communications)
• the number of US online auction purchasers is expected to reach 6.5 million by 2002, compared to 1.2 million in 1998 (Jupiter Communications)
• we are awaiting the internet auction boom in the UK - this may happen in 1999