The online auction market is here to stay. Globally, it moved US$ 5.9 billion in 2021 and should reach US$ 11.5 billion in 2027, according to a survey by Researchsandmarkets. And it has everything to grow exponentially with blockchain. The technology that has revolutionized many markets and is one of the structural bases of web 3.0 was a source of inspiration for Ronaldo Santoro, founder of the Bomvalor network. With experience in the auction market, the entrepreneur started the startup with the acquisition of a software house and, from there, incorporated blockchain technology into it, taking the auction market to a new technological and security level. “Online auctions have been establishing themselves as an advantageous alternative both for those who want to sell, and for the potential buyer, who can evaluate a wider range of alternatives”, highlights Ronaldo Santoro who, in addition to being founder, is head of Digital Products and Technology at Bomvalor network.
The internet auction market already accounts for 90% of the total traded in the various trading modalities (online, hybrid and face-to-face), according to an estimate made by the company itself. The movement reaches R$ 100 billion a year.
Since the beginning of the pandemic, the number of people who have started to attend auctions for different screens has risen between 20% and 70%, depending on the category of goods. In the segment of used and semi-new vehicles for own use, for example, the increase was more than 40%, largely due to attractive prices — the initial bid is always well below the market price — and payment options. A market that only grows and, according to the Union of Auctioneers, will continue to grow.
90% is how much the online auction market represents of the total traded in the various trading modalities
According to the CEO of Bomvalor, Fábio Kielberman, more than 100 online auctions are held daily throughout the country in the extrajudicial segment, that is, by private companies that want to dispose of goods or inventories, whether to renew assets such as machines and fleet, or dispose of third-party assets obtained as collateral in any business. Seeking to increase participation in this market, Bomvalor leverages the business in its network with the use of blockchain. In the last two years, it has held more than 7,400 online auctions of various goods on its electronics platform (which brings together more than 40 auction houses).
In 2022, there were around 5,000 auctions in its network, more than doubling in the previous 12 months, when it operated something around 2,400 auctions, involving the sale of 25,200 lots — 46% more than in 2020. For Kielberman, even having already moved BRL 1 billion, the company’s main focus is still not on revenue, but on creating and testing viable business models for auctioneers. Today, the startup already has a contract for corporate auctions with Vale and is negotiating with giants like Votorantim and Santander.
“Even with R$ 1 billion moved, the main focus is still on creating and testing viable business models for auctioneers” Fábio Kielberman CEO of Bomvalor.
IN PRACTICE As it is an old and highly regulated market, the platform becomes a means of connecting auctioneers and buyers. In Brazil, auctions are not permitted without the intermediation of an auctioneer who, by law, must receive a 5% commission on the sale. From this, Bomvalor does not earn from the sale, but charging for the use of the platform, a cost of BRL 500, paid only when the user makes the first sale. For the future, the goal is to offer the professional more than an online environment for holding the event, but also help with services such as item evaluators. “One of our goals for this year is to expand this network of professional supporters”, said the executive.
It is also possible to carry out practices that are already common in the segment, such as division of commissions and with the blockchain everything is easier: a token is generated that represents the ideal fraction of each part, fully authenticated and fast within this technology. It is possible, for example, to buy an apartment from several people, without the problem of division, since the platform takes care of that part. Using one of the biggest trends in technology today, Bomvalor should take advantage of its pioneering spirit in the segment and continue to grow in terms of transactions and, in particular, users in the coming years.
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