The pasar malam is one of the more well-known places in Singapore to shop for good bargains on electronic products such as powerbanks and smartphone accessories.
That could change, however, with such products now available via ‘live auctions’ on Facebook.
SG Auction House and Grunge Bidding Mobcube Singapore, both of whom are retailers of electronic products and accessories, are some companies which have been using Facebook’s live video feature to hold auctions for their products.
SG Auction House also sells other items such as branded bags and Thai amulets.
Here’s how it works.
The sellers will first announce the time and date of their live auctions on their respective Facebook pages in advance.
During the auction, bidders will watch a seller welcoming everybody tuning in before he or she starts to introduce the first product and start the countdown timer, typically set to at least one minute per product.
Bidders tuning in are able to submit product queries and make their bids in the comments section.
The winning bidder will be required to make a bank transaction to finalise the purchase.
While SG Auction House tends to flash the company’s bank account details on the screen to facilitate the transaction, Grunge Bidding Mobcube Singapore contacts the winner via private message.
For SG Auction House, if the winner of the auction fails to make the transaction, the product will automatically go to the next highest bidder.
Buyers are often required to collect the goods themselves, but can opt to pay a fee if they wish for the items to be delivered. SG Auction House charges $4.50 per delivery.
Better than buy-and-sell apps and brick-and-mortar?
In a recent interview with Yahoo Lifestyle Singapore, SG Auction House owner Ken Chen said he chose to do such auctions online because he could show potential buyers the unpackaged item and reply to any queries immediately.
“On other platforms, you have to wait for the seller to reply and sometimes it takes a few hours, sometimes it takes a few days… sometimes they don’t even reply,” Chen said. He owns another Facebook page, N2 Mobile, which he used for his first live auctions before starting SG Auction House.
“Consumers like to see the item they’re buying . If you’re selling online on Carousell for example, they can only see the pictures and it’s not interactive enough for them. They want to be able to see the whole thing,” said the 28-year-old.
But the convenience of being able to connect instantly with potential buyers isn’t the only draw of these online auctions.
“One auction can cover a whole day’s worth of sales in a retail store,” said Chen.
According to Sharon Eng, owner of Grunge Bidding Mobcube Singapore, her company’s Facebook page gets an average of 10,000 views per live auction, with up to 200 bidders tuning in each time. Her company had its first Facebook live auction in March this year.
Meanwhile, Chen, whose company conducted its first auction on 17 March, said that some of his live auctions have garnered 50,000 views for a single session, which generally takes up one and a half hours.
While he currently owns two brick-and-mortar retail stores in Bukit Timah and Bukit Batok, almost 100 per cent of his recent revenue has been generated through these live auctions, which sell around 300 items each week.
“How long do you have to wait for 50,000 people to walk into your shops to view your items? Do you have 7,000 people walking into your shop a day? And that number is just within 1.5 hours of auction,” Chen said.
Besides snapping up good bargains, Chen also noted that bidders tend to enjoy the “adrenaline rush” that comes with such live auctions.
“It’s the competitive mindset, when they win something on the auction they get an adrenaline rush,” he said, “They’re willing to spend a little bit more on auction but if you ask them to go out and buy something [of the same price] they might not be willing to.”
Not without risks
While Facebook live auctions are a great way to boost revenue for these retailers, this comes with its own set of risks, such as having to sell certain items for less than the actual retail price if the bids remain low.
“It all depends on the bidders… At the end of the day, if the final selling price is below the actual retail price, we still have to honour the transaction,” Eng, 30, said.
It’s a similar story for Chen. “We always ask the bidders to honour their bids, so it’s only right for us to honour the price even if it’s low.”
However, Chen said that there are times when items are sold for up to 20 per cent higher than the retail price.
Sellers also have to be wary of insincere buyers, who place bids for fun with no intentions to follow through.
“The risk of this platform is that we can’t gauge who is genuine and who is not. Sadly there has been a lot of saboteurs, and they are always trying to out-bid the genuine bidders to jeopardise the auction,” said Eng, whose company also sells products via popular online marketplace Qoo10.
To combat this problem, Chen has a 10-person strong back-end team dedicated solely to banning these “trolls” from the auctions.
“The moment they [the insincere bidders] start commenting, we know they’re up to no good and the back-end team will remove them,” Chen said.
Watch a previous live auction held by N2 Mobile:
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