THE FUTURE OF AUCTIONS IN SOUTH AFRICA (May 2025)
OPENING BID?
Item number 2-0-2-5,
Lot: ‘Your Future.’
Who’ll give me change?
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First published in 2025
Ever been to an auction? I personally have not, but I recently acquired two clients in the industry. One was an exceptional client; the other, unfortunately, breached their contract with one of my businesses! Let me not name and shame.
The experiences did, however, get me thinking about the auction industry in general. The concept of auctions dates back to ancient times, with evidence suggesting that the first recorded auction took place in the famous city of Babylon around 500 B.C. The history of auctioneering on our home turf, Africa, has its roots both in indigenous customs and the adaptation of European systems brought during the colonial period. This happens to be the case with several markets on our continent and perhaps is a subject for another article.
Back to the subject at hand: auctions! During the colonial period, European settlers introduced formal auction systems into Africa, and for a period of time, it was the common, if not the preferred, method for trading goods, including but not limited to livestock, produce, and even land. This is what the textbooks will tell you anyway. Auctions, unfortunately, also played a part in the slave trade, particularly during the transatlantic slave trade period—a bit of history well worth learning about.
Nevertheless, auctions rolled out in South Africa, Kenya, and Zimbabwe. As countries gained independence and time went by, the auction industry in Africa evolved significantly, eventually being heavily adapted by the industries of real estate and vehicles.
After completing some research and watching some videos of past auctions, I have formed the opinion that they have a rather unique, fun quality about them, setting them apart from a cash register transaction at a shopping market.
Even though they are paying, they call the person a ‘winner’, and many show great excitement at the fact they just offered to pay more than anyone else and now have a bill as an award. (Go figure).
Theatrics aside, auctions are one of the best ways to fetch a competitive price for just about anything and something you might want to consider one day.
The most expensive item ever sold, in traditional ways, was probably the 1963 Ferrari 250 GTO, which sold for about $70 million in 2018. (Such a sexy looking machine!) In comparison, the most expensive item at an auction had a successful bid of $450 million, and that winner walked away with Leonardo da Vinci’s painting “Salvator Mundi.”
Here in South Africa, we have a well-developed industry known for conducting large-scale auctions of vehicles, real estate, and even luxury items. One of the most expensive items auctioned in South Africa was a diamond called the “Pink Star,” at a whopping bid of R69 million, managed by Sotheby’s auction in Cape Town in 2017.
Auction action has been going on for hundreds of years, and the first-ever auction company in South Africa was probably C.&A.—not the stationery shop, but a business by Frere & Company, established in the mid-1800s. A lot has changed since then, and the biggest development has to be online auctions and web and social marketplaces. This has given many smaller companies in the industry an opportunity to reach larger markets, competing for new clients from the same pool that the bigger players are fishing in.
How many players are there? Well, probably nearing 200 businesses.
Now, anyone who has read some of my work will know one of the things I always ask about the businesses in a sector I am working with is, “Will these businesses be around in the future?”.
I have done the same for the auction industry, and unfortunately for those in the sector, technology is allowing for untraditional entrants who are, for the most part, only trying to diversify and augment their income by using an off-the-shelf or ‘already Online’ auction-style service, and with this nibbling away at their client base.
It is this threat that needs to be mitigated if current businesses wish to maintain or even build their market share.
What other influences might be at play? Well, digital transformation and the rapid expansion of internet access and mobile technology in Africa must be considered. Nearly fully automated solutions for listing stock, selling, and helping with buyer engagement—all at the touch of a button on a web browser or app—will bring certain death to that small ceremonial hammer. I really believe that the chances of the most successful companies running auctions in the next 10 years might not even be auction companies.
As an environmentalist, I must always mention renewable energy. Governments and businesses are investing (but not enough yet) in solar and wind projects to try to address energy shortages and reduce our dependence on fossil fuels. Of course, in South Africa, our Minister of Minerals and Resources is still championing fossil fuels, which is doing things a little backward. My point is that there is a massive shift in the marketplace, and what the sector will see is a proportional change in its respective client base and their habits. Really think about it: what sort of things might be sold when we no longer want to buy a car that runs on fuel or a house that does not have solar panels? Do you think there will be as many petrol stations around in 20 years’ time? I promise you, there won’t be. What’s going to happen to those buildings, land, and equipment? What about those businesses? Liquidate? There will be an increased demand for green assets.
Climate change will especially affect businesses that wish to work with livestock
A Youthful Population and Workforce is another major influence. Africa is going to have the youngest population in the world, and the main point to consider here is that the generations that follow will own less. Subscription and circular economies will be much bigger.
When it comes to compliance, the industry focuses on regulations such as POPIA, and that is good; however, I have seen little evidence of any concern regarding cybersecurity and policy regulation for compliance around that. Any website that gathers, processes, stores, and shares data and/or funds needs to be as protected as possible. A business is subjected to hacks, and everyone is duty-bound—from your receptionist to your CEO—to take reasonable steps to safeguard this information or data, or risk civil and perhaps even criminal prosecution. And please remember, it’s not just the business at risk; the Information Regulator and the Cybercrimes Act hold individuals responsible as well.
Finally, not that my list is exhaustive, (but I do have a word count limit for articles), the future of money, digital currency, e-payment platforms, and cross-border jurisdiction freedoms might be some of the greatest positive influences for the sector, offering more global reach and accessibility, faster transactions, enhanced security, and attracting tech-savvy clients of all ages.
Why is no one using Bitcoin for auctions yet? Is it because of lack of trust in this tech?
On that subject. There is a negative trustworthiness rating for the auction sector in general. Google the service, and you will find people making comments about service providers in the industry: Calling them thieves, saying that staff don’t know what they are doing, or taking too long to act, being non-transparent, or taking too long to get deposits back, or that mileage has been tampered with—these are just a few complaints. Technology can help mitigate this if used correctly.
With that said, there are many happy clients as well. For those who are keen to try one of these service providers, there are hundreds to choose from in South Africa. Some of the global leaders are eBay, Sotheby’s, and Christie’s. There are also Bidsquare and AuctionZip, which offer a streamlined bidding process with mobile accessibility; you can track auctions and receive notifications on your smartphone.
You might also want to Google Heritage Auctions or Copart, which deals with vehicle auctions for buying and selling salvage cars. Other options include BidSpotter, AuctionZip, and Cat-a-wiki.
Ritchie Bros. is a good one to view if you deal with heavy equipment and trucks, and Phillips Auctioneers appears to be very good with fine art, antiques, and collectibles. Don’t forget to visit Aucor and GoBid.
My recommendations to the industry are to use technology to work on the sector’s narrative. Portraying a good experience and a brilliant alternative to other methods of buying and selling is essential. Social media, PPC (Pay-Per-Click), and SEO (Search Engine Optimization), when prepared in a clever campaign, can do the trick. Take a fresh look at the complaints you receive online and create services that address those complaints, such as in-house insurance, after-sale support, logistics and shipping, inspection, and authentication. Gosh, consider hosting a transport service for seniors for pension day or a campaign for parents and their child’s first car!
Make sure your website and app are perfect. User experience and engagement are key. (I recommend you use www.websitedesign.co.za for development.) Additionally, make provisions for virtual previews and live events.
Don’t underestimate email marketing.
Final and most important tip (let’s call this Closing the Bidding). Focus on diversification. If you’re a room full of a certain gender and race, a business that offers services in isiXhosa and isiZulu, or auctions specifically for women, will immediately have a significant advantage in accessing a new market.
The END.
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Who is Jean-Pierre Murray-Kline?
Jean-Pierre is a South African serial e-entrepreneur, published author, and change champion who has worked in over 300 types of industries in some capacity or another. His own online businesses have generated millions of Rands and involved sectors such as law, web & app development, events & entertainment, property, technical services, media, and tourism.
He has traveled to over 180 cities worldwide and is extremely active as a business and environmental technologist. In addition to his own projects, he researches and consults on all things online: marketing, reputation, compliance, law, and e-security, and also offers strategy workshops and scenario sessions on future thinking with a key focus on technology, the environment, and global influences.
Jean-Pierre is often asked to be a guest speaker on a variety of subjects he continuously studies and writes about.
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