Analysis

A lot to celebrate: Ritchie Bros. marks 20 years in Dubai

Global machinery auction powerhouse Ritchie Bros. has been in the region for two decades

When you have been conducting auctions for more than two decades, it can be expected that you have the whole process down to a pat – as Ritchie Bros. do.

The Canadian multinational machinery auction house celebrated its 20th year of auctions in Dubai last month with another of its trademark auctions at its Jebel Ali facility, and again everything ran like clockwork. And this time, to mark the milestone, the company’s communications specialist, Alexander Ypeij, and regional sales manager, Dubai, Eduard Faig, took CMME through the company’s history in Dubai, revealing some very interesting facts.

Over the last two decades, more than 120,000 items have been sold at Ritchie Bros.’ auctions in Dubai, Ypeij reveals, as the company celebrated its 20th anniversary in the UAE with its Dubai auction on December 13 and 14.

Businesses from the wider Middle East region had consigned 1,700-plus heavy equipment items and trucks to the two-day unreserved auction for which bids were made in person at the auction site or online at rbauction.com and by proxy. This online bidding is a special feature of auctions at Ritchie Bros. and one that has recently assumed greater importance than ever before, but more about that later. First some history: Ritchie Bros.’ inaugural Dubai auction was held in 1997. Since then the company has held 72 auctions in the city, selling over 120,000 lots and registering more than 40,000 bidders. And as the numbers added up, the auctions, too, evolved with the times. Today’s auctions in Dubai are a lot different from those conducted 20 years ago, Faig and Ypeij say.

“At the first auctions in Dubai, bidders were seated in a huge tent and everyone joined in person as we didn’t have online bidding yet,” Faig tells us. “Now we run our operation in a comfortable auction theatre, with a full-service equipment yard. Through the years, more bidders from more countries outside the region found their way to our Dubai auctions, either in person or online, making it a powerful auction hub. Every year businesses from all over the Middle East, Asia and further away rely on us to sell and buy the equipment they need.”

The Dubai auction on December 13 and 14 was Ritchie Bros.’ 73rd in the region. Befitting the importance of the occasion the number of bidders – 960 – was a record for Dubai, with 54% onsite and 46% online and coming from 71 countries. Equipment highlights included 60-plus cranes, including a 2014 Sany SAC2200F 220t all-terrain crane sold for $560,000; a 2008 Manitowoc 14000 crawler crane sold for $517,500; more than 70 excavators, including a 2011 Caterpillar 336DLN hydraulic excavator; over 75 compactors, including 10 unused 2016 Dynapac CA255 vibratory rollers; more than 15 bulldozers, including two 2013 Caterpillar D6T bulldozers; 170-plus generator sets; and many more items.

“Over the years things have changed a lot,” Ypeij says. “Online bidding has taken off significantly. Today, in Dubai auctions, around 25% of the sales come from online bidders. Compared to our operations, online sales here are still low. Globally it’s around 50% at the moment while Dubai is around 25%, but what is remarkable is the way that online has taken off even here in Dubai in recent years.”

Things have changed in other ways, too, he adds. Back in the day, stationary equipment was sold in the yard with a bunch of bidders moving around the equipment, following the auctioneer’s soundtrack.

“In Dubai the summer auctions were getting rather hard, but the bidders would still follow the auctioneer around to the best of their ability – and ours as we did the auction. Today it’s a little different. Convenience is a very important factor for both sellers and buyers that we work with. So stationaries are now sold by hat we call the Virtual Ramp. It keeps rolling in front of the crowd,” says Ypeij.

Another change introduced a couple of years back to make things easier was Timed Auctions, he points out. “The Timed Auction is like an eBay type system – it’s only online and there is no auctioneer involved. People have a few days to place their bids. Then a timer starts and when it finishes its countdown on the particular time and date the item gets sold to the highest bidder.”

Speaking about how the online side of the business has taken off in Dubai, Ypeij adds that when the service was launched here in 2002, online bidders comprised less than 1% of the total bidders at their auctions.

“Over the years we have developed our service and around six months ago we redesigned the whole online bidding,” he explains. “Online bidding is very important now and the acceptance of buying things online has significantly increased around the world. The trend is gaining strongly among our customers here as well.”

Advocating the need for both online and onsite bidding systems, Faig adds that having both in place allows buyers the convenience of choice as to how they want to join in. “For the seller it is pretty important to reach as many bidders as possible from around the world. The more local and isolated the auction is, the more it will depend on the conditions in a local market. But with online bidding you have greater international reach and you can sell to a global market no matter where the auction takes place,” he explains.

“In 2015, 63% of our total global customers bid online and around 52% of the lots we sold were to online bidders around the world. Again in Dubai, the corresponding figure was around 25%, but it’s climbing fast. In monetary value, we saw $1.9 billion worth of online sales last year.”

The increase in online sales, of course, mirrors the overall increase in sales volume in Dubai since Ritchie Bros. set up shop in the city two decades ago. Speaking about the history of the company’s operations in Dubai, Ypeij throws up some startling figures: “In 1997 we sold a very small number of lots – under a 1000. There was a high in 2003-4, a dip in 2005-6 and periodic crests and troughs in our sales, as per market conditions.

“If we add up all the lots sold here over the past 20 years, the equipment will stack 60 times the height of Burj Khalifa when placed one on top of another. In fact, just placing all the wheel loaders that we have sold in Dubai so far in a straight line, we would have a line stretching all the way from the Palm Jebel Ali to the Palm Jumeirah.”

A lot of things may have changed and improved in the 20 years that Ritchie Bros. has spent in Dubai, but some things have remained constant. The auctions are still unreserved, with no minimal or reserved prices. “So everything seen in the yard today will be sold by tomorrow. There is an aspect of certainty that is reassuring for both the seller and the buyer,” Faig adds.

“Transparency is a very important factor for us. We welcome hundreds and thousands of people around the world every year. There are some basic rules for transparency and fairness – like we don’t make judgements on the equipment that we sell,” Ypeij explains. “We try to make it easy to find what they need, make as much details as we can available to them, have fully open and transparent auctions and offer a lot of additional services, such as insurance, finance, storage and logistical services.”

With the ideal combination of upholding its traditional values of transparency, trust and probity, along with a futuristic outlook of providing the best of modern technological conveniences in its field, Ritchie Bros. can well look to hammering out another two decades of excellence in Dubai.

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