Dubai continues to be a global hub for trading construction equipment in 2019, with another successful auction held by Vancouver-headquartered auctioneer Ritchie Bros. at its yard in Jebel Ali Free Zone in March.
Like previous years, Dubai is an important trading point for buyers and sellers from the region and beyond, and at the March event there were 1,727 lots sold.
“Dubai is a hub for us, very strategically located and it is a platform for connecting people from different parts of the world. We are global connectors, and Dubai is a microcosm of the global economy,” says Ritchie Bros. CEO Ravi Saligram.
Dubai’s global reach is growing as Ritchie Bros. develops its online business in tandem with its traditional auction events. For the March event, 55 per cent of the registrants and 31 per cent of the buyers for the auction were online. This trend follows Richie Bros.’ home market of North America where selling online is now a significant part of the company’s business.
“In 2018, 59 per cent of our total $5bn was online. It has grown, that has rapidly changed over the past 10 years,” says Saligram. “We have sold a million dollar piece of equipment on our mobile app.”
The growing online component of Ritchie Bros.’ business enhances its position as a channel for buyers to purchase competitively priced equipment while sellers access liquidity. “At Ritchie Bros., supply meets demand in real time. Given that customers like this because of the transparencies and with the scale and reach, consigners are happy because they know we are creating markets for them to sell to,” says Saligram.
Access to the market is particularly important for companies that are starting out in the construction sector.
“We are an enabler of small and medium-sized businesses,” he continues. “Contractors around the world, for the most part, start out small and this whole industry really spawns entrepreneurs. Someone might start with a single machine and they might grow, and Ritchie Bros. enables them [and] gets them started in the business – because many that start out small are looking for used equipment.”
“As companies get bigger and finish projects they then might want to get rid of their equipment. Our live auction here is best suited for providing immediate liquidity because it is an absolute auction. It is unreserved and very transparent.”
Globally, Saligram says the equipment business is performing well, and he expects that to continue through 2019. “There have been supply constraints in the US. Demand was very high in 2018, but supply from the OEMs and the production of new equipment has lagged.
“In 2019, there will be a gradual – with an important emphasis on gradual – loosening of supply,” he adds. “We still think 2019 will be a good year for the construction business, [but] it will not be as strong as 2018.”