Auction portal Similan to charge fees

For Singapore-based auction portal operator Similan, "free" is no longer the mantra for its services. Come May 23, sellers will be levied a 5 to 6 per cent commission on every successful transaction.

"Free" is no longer the mantra of Asian auction portal operator Pte Ltd.

SINGAPORE--The Singapore-based company runs consumer auction site and business-to-business site SurfingBiz, which target users in Singapore, Malaysia, the Philippines, China, Hong Kong and Taiwan.

In a recent circular to its members, Similan said it will impose a fee come May 23. Specifically, sellers will be levied a 5 to 6 percent commission on every successful transaction, depending on where the item is listed on the site.

A statement of account will be sent to users for every transaction made online. No further details were provided.

However, Similan noted in the email that it will not charge for listings, biddings or failed transactions. In addition, the two-year-old company will give away a S$10 credit to all members who sign up before May 15. (There is no expiry date tagged to the credit.)

While its predecessors--Yahoo Inc, eBay Inc and Inc--are already imposing listing fees in the US, Similan might face tough competition from Yahoo in Asia as the latter has maintained that its online auction services will remain free in the region.

Yahoo explained then that the separate approach was due to "different consumer habits" in Asia compared with the US.

"If one is charging and another is not, obviously people will stay with the one that is free," International Data Corp senior analyst of Internet Research Matthew McGarvey said.

Moreover, Yahoo has a "stronger brand name and a larger reach," he noted, adding that the Similan's chance of success is "extremely thin" if its value-added offerings are not better than the former's.

Meanwhile, technology analyst KC Lee had earlier warned about a backlash from consumers once fees are levied. "You have to understand the Net culture. People expect everything to be free."

For instance, Yahoo saw the number of auctions listed on its US site plunge weeks after it began charging listing fees (in January), according to auction watchers. A Yahoo representative acknowledged the decline but could not confirm any figures.

On the local front, Similan also competes with players such as Allegro Pte Ltd and InterAuct Pte Ltd, which have kept their online auction services free to consumers.

However, both Allegro and InterAuct have turned to licensing their online auction engines for revenues amidst a slowdown in online advertising.