Global Online Auction Market (by Product Type, & Region): Insights and Forecast with Potential Impact of COVID-19 (2022-2027)

In recent years, younger audiences have displayed a strong interest in auctions and are eager to use online platforms to get what they're looking for. High-Net-Worth Millennials have thoroughly embraced the digital shift witnessed with auctions, and they were the top spenders in 2020. This is mostly due to the millennials' transition from being the young, industrious, and underpaid generation in their 20s to the group's eldest members entering their 40s, and they now have enormous purchasing power that they did not have a few years prior to this.

An online auction is one in which auctioneers or bidders offer or bid on items or services through the Internet. Because the auctions are taking place via the internet, it is no longer a geographically limited market. The key advantages of online auctions include an enormous reach, being open 24 hours a day, ease, broad exposure, acceptance of universal products, quick and reliable transactions, less onsite operations, and so on. The global online auction market is anticipated to reach US$7.42 billion in 2023, progressing at a CAGR of 11.50%, during the forecasted period.

Segment Covered

By Product Type: In terms of product type, the report identifies five segments of the global online auction market: fine art, jewels and watches, cars, decorative arts and furniture, and others. The fine art segment held the maximum share in online auction market, owing to the growing number of end consumers adopting online as their preferred channel.

Geographic Coverage

According to this report, the global market can be divided into five major regions: North America, Asia Pacific, Europe, Middle East & Africa, and Latin America. The countries covered in North America region are the US, Mexico, and Canada, while Asia Pacific includes China, India, Japan, and the Rest of Asia Pacific. Moreover, the UK, France, Germany, and rest of Europe are included in the Europe region. The fastest growing regional market is Asia Pacific, driven by the three key drivers have been identified: sustainability, affordability, and collectability, which continue to propel the demand for online auction in the region. China continues to be the largest online auction market within Asia Pacific, occupied the highest share in the region, owing to the country's transformation into a consumer economy based mostly on digital technology during the previous two decades. Further, young, wealthy bidders and debt transactions are pushing China's booming online auction market ahead.

Top Impacting Factors

Growth Drivers

• Rise in the Use of Internet for Auction
• Rapid Urbanization
• Surging Millennial Population
• Growing Recognition of NFT

Challenges

• Security Concerns Interfacing
• Auction Fraud

Trends

• Growing Popularity of Mobile Bidding
• Integration of Artificial Intelligence (AI)
• Growing Influence of Digital Marketing
• Cloud-based Live Streaming Online Auction

Driver: Rise in the Use of Internet for Auction

The advent of internet has created a huge impact on the overall widespread of auction across the world. With the internet, people could place bids anytime from anywhere, on any device. The growth in the online auction market is primarily driven by the advancements in technology like high-speed internet connection and secured payment options, and growing smartphone penetration. With online auctions, there is no need to attend the auction events, which are organized offline. Here, auctioneers generally incur less property or transportation costs, as well as avoid the need to provide for additional security and porters for in-room bidders and telecommunication support for phone bidders. Thus, the rise in the use of internet for auction would drive the growth of the online auction market in the coming years.

Challenge: Security Concerns

Security and safety is an important topic in conducting business on the internet; online auctions are no exception. During the auction, buyers and sellers have to submit their personal information to the system, as well as provide electronic payment for their goods. Thousands of credit card numbers, home addresses, and phone numbers were exposed for months through a security hole on many internet auction sites. Furthermore, most online auctions do not enforce strong authentication, relying instead on a user ID and password, or may be an email account, to establish the validity of a client. Once this minimal information is supplied, people are free to enter into the online auction system and participate in bidding. Therefore, the security concerns would negatively impact the growth of the online auction market.

Trend: Integration of Artificial Intelligence (AI)

AI is used in online auctions to do various activities including processing customer-service inquiries, product packaging, internal operations, as well as delivery. Specialized functions such as fraud prevention, anti-money laundering, and pricing are set to be overhauled using the artificial intelligence in the auction industry. Meanwhile, the data collection opportunities AI provides would help companies achieve automation and enhanced personalization. The use of AI provides massive opportunities to the entire auction process, which can empower the auctioneers to make smarter decisions. Hence, integration of Artificial Intelligence (AI) would assist the online auction market in coming years.

The COVID-19 Analysis

The global online auction market was impacted in many ways by the COVID-19 pandemic. The COVID-19 brought in many changes in the world, which were majorly positive, with digital transformation of economic activities were seen taking place rapidly. Convenience was another big factor in the popularity of online auctions, buying retail has been tricky with COVID, and purchasing online is an easier and safer option. The changes brought in by COVID-19, such as rapid shift to online, introduction of enhanced viewing experience via AI, AR and VR, sign up by e-mail before visiting the viewing day of an online auction, new emphasis on sustainability, etc., are looked to have long term impact in the post COVID era.

Analysis of Key Players

The vendors are using both organic and inorganic expansion tactics to compete in the fragmented online auction market. The market's players are integrating cutting-edge technology to display their auctioned products in the most appealing manner possible. Further, key players in the online auction market are Ritchie Bros. Auctioneers Incorporated, eBay Inc., Auction Technology Group PLC (LiveAuctioneers.com), Mortgage Specialists International, LLC (Auction Network), Epiris LLP (bonham.com), Ebid.com, The Auction Company (TAC), Invaluable, LLC (AuctionZip.com), OnlineAuction.com, Inc., WebStore.com, Catawiki, Biddingo.com, and A One Salasar Pvt. Ltd.