Online auctioneer kills off adverts with site revamp
Despite a series of failures among SAR online auctioneers, Go2HK .com has revamped its Hong Kong and Taiwanese auction sites.
The newly designed sites, to be launched next month, aim to provide a simpler, more user-friendly and reliable marketplace for users.
'Our site will be modified to be more systematic,' said Alan Chow, managing director and co-founder of Go2HK.com. 'Users will be able to personalise the Web page and make it more user-friendly.'
Another change will be the elimination of banner advertising.
'Unlike most of our competitors, we decided to cut the advertising banners as we found they could not generate much revenue,' said Mr Chow.
'On the other hand, we hope our users will be more comfortable browsing our site with faster loading time and fewer pop-up ads.'
He said Go2HK would generate most of its income from commission charged to sellers after they made successful transactions. Commission rates generally range from 3 per cent to 5 per cent per item.
Since its launch in July 1999, about 75,000 people have registered as members. The membership base also has grown 52 per cent this year.
Go2HK estimated that about 35,000 users bought or sold through the site every month.
During the year to last month, the site narrowed its monthly loss from HK$463,000 to HK$75,000.
'Though we are still losing money, we have managed to cut our operating expense from HK$482,000 last year to HK$213,000 this year,' Mr Chow said.
Go2HK's revenue in August soared by 621 per cent to HK$137,000 from HK$19,000 two years ago. However, gross merchandise sales dropped from HK$10.8 million last year to HK$6.6 million this year.
'We are satisfied with the [gross merchandise sales] despite a decrease of almost 40 per cent,' said Mr Chow.
'In many other countries, auction sites would experience up to a loss of 90 per cent once they start charging commission. Frankly, it is better than our expectations already.'
The company expects to break even in March.
Mr Chow said the increase in Taiwanese members had inspired him to develop online auctions across the strait.
'I believe we will benefit much in that we can save much of the shipping costs,' he said. 'Also, Hong Kong and Taiwan have a similar technology level so that products offered at our site will be suitable to the Taiwan people as well.'
Go2HK launched subsidiary branch Go2TW.com last year.
'Although we did not have any formal advertisement or promotion, we found there was healthy growth in the number of members. After we reach a breakthrough, we would have a formal launch of the site and develop the Taiwan market,' said Mr Chow.
In Hong Kong, the number of competitors has dropped, but competition remains keen.
Competitors such as Emaimai, Clubciti and Yaz have folded or changed direction, while Yahoo! and Sun Hung Kai Properties' Red-dots.com remain the toughest rivals.