New HK-based 'auction' website rewards unique bids, but not necessarily the highest
Online shoppers are likely familiar with auction websites such as eBay or Yahoo Bid, where the bidder who offers the highest price wins the product.
Now, however, a controversial alternative has arrived in town. A local website called uBidiBid has brought "unique price auctions" to Hong Kong, claiming skilful bidders can buy a product - possibly a HK$5 million flat - at one per cent of its retail price.
But the tempting offer comes with a note of caution from watchdogs, who say participants should be mindful of transaction costs and legal issues.
In a press conference yesterday, uBidiBid introduced the bidding mechanism.
A registered bidder can buy virtual coins for HK$5 each. He can make as many bids as he wants for a product on auction, but is required to pay a transaction fee using the coins to place each bid. The winning bid is the highest bid made by a unique participant - if two bidders offer the same amount, then both bids would be disqualified.
If the website put up a product with a retail price of HK$1,000, bidders are allowed to place a bid of any value from one cent to HK$10. If two people place bids at HK$10, both of them fail. A person who bids at HK$9.90, with no other bidders competing at the same price, would win the auction.
In order to win, a bidder must monitor others' bids constantly and make new bids that no one has offered yet.
It is not necessary for losing bidders to pay their offer; that would be the HK$10 in the above example. But they have to pay a transaction fee for each bid, which varies between auction items regardless of whether they win or lose.
Cash coupons and electronics are currently being auctioned on the website, founder Thomas Leung Chin-pang said. Depending on the site's popularity, more expensive products, such as cars and flats, could follow.
Estate Agents Authority member Charles Chan Chiu-kwok raised a legal concern, saying the website would require a licence to sell flats.
Leung Tin-cheuk, assistant professor at Chinese University's department of economics, said that while bidders would love to win attractive products like a flat, chances are that such items would attract more bidders and therefore reduce each person's chance of winning.
Consumer Council chief executive Gilly Wong Fung-han agreed: "People may want to try their luck.
"It's similar to the mentality of buying Mark Six… it is important to set a ceiling on how much he would risk."