Big challenge for new online auctioneer taking on Trade Me, UC expert says

A University of Canterbury (UC) senior lecturer says it may be tough going for some time for a new competitor to Trademe in the online auction market.

Mainfreight founder Neil Graham is taking on Trade Me with a new online auction and classified site, Wheedle.co.nz, which is open for business on Monday.

Wheedle will launch an advertising campaign on Sunday to promote the site. UC lecturer Ekant Veer said Trademe had not just successful because it was first; it was successful because it had strong brand presence and loyal customer base.

``Trademe’s brand knowledge in New Zealand is so strong that people use it as a verb: `Oh no, I’ve been given a duplicate present – don’t worry, I’ll Trademe this one!’.  This all comes from experience and personal inter-action.

``No amount of marketing can overcome a personal experience with a service provider. People may be enticed to try Wheedle, but this is not to say that it will become a powerful player against existing platforms.  Trademe also has a strong community spirit with their forums and community pages, which draws people back day after day.’’

Dr Veer said Graham said his platform had the management experience and the technological firepower to make it a success. But unfortunately, users were unlikely to value these aspects, unless they saw a tangible and substantive improvement in their online shopping experience.

Trademe thrived on its rating system which builds trust into the relationship people have with anonymous buyers and sellers.

``How Wheedle overcomes this without a buy and sell history will be difficult.  What online customers want are good prices, good availability of products and the assurance that their products will arrive in a timely manner.

``As a seller, you want the assurance you’ll get paid in a timely fashion.  How Wheedle achieves these things is yet to be seen,’’ Dr Veer said.

The Wheedle operation will run off 40 servers in IBM's Auckland data centre. Wheedle had 10 staff in Christchurch and another 12 in India who had been developing software for the site and who would be involved in another undisclosed venture.

Wheedle aims to undercut Trade Me, charging a flat-rate $1 fee on items that sell through the site for more than $20. The fees will be waived and the site will be free to use until November 29.