Ritchie Bros is one of the largest equipment platforms worldwide, transacting hundreds of thousands of items each year. Eduard Faig, Regional Sales Manager, Middle East, Africa and Asia Subcontinent, Ritchie Bros elaborates on the company's presence in the global market and its future plans for India.
What is the current market share of Ritchie Bros in the global construction equipment auction market?
The global used equipment market is estimated at $300 billion, in which about $25 billion is auction-based transactions. Ritchie Bros in 2017 transacted $4.5 billion (gross transactional value). From a global perspective, the used equipment market is highly fragmented with countless places, where one can buy and sell equipment. Still, Ritchie Bros is one of the largest equipment platforms worldwide, transacting hundreds of thousands of items each year.
What is the share of used and new equipment in your inventory?
At Ritchie Bros and IronPlanet, there is really a lot of diversity in inventory, and buyers can find, both used and unused items. It can vary but usually there's around 50,000 items available on our websites, rbauction.com and ironplanet.com. Around 10-15 per cent of these are unused items, ranging from heavy equipment items and trucks to smaller items, attachments, gensets and parts. There is an easy filter function on our website to see all unused items.
What are the key products and services offered by Ritchie Bros for global and Indian market?
One can browse the many categories that are available on our websites, ranging from construction, agriculture, lift and access to mining, transportation and more. A large part of the items we offer is construction and construction-related products, ranging from excavators, wheel loaders, dozers, dump trucks and much more. But we regularly have more specialised items in inventory as well, such as heavy all-terrain cranes, pipe layers and aggregate plants.
Which equipment categories drive the market growth?
Looking at India specifically, there are big projects in the mining and infrastructure sectors. What we see from a demand perspective is that our Indian customers are looking for typical road construction products such as 20 tonne and above excavators, compactors and pavers. Customers in mining are often looking for larger dump trucks, drills and mining excavators.
What is your market share in India?
For many years now, we have been fortunate to work with businesses in India to sell and buy equipment all over the world. Especially, in recent years we have seen a steady growth in participants at our auctions. Part of this is due to the boom in construction activity since mid 2015. When in 2017 several metro projects were awarded, we witnessed a renewed appetite for equipment, encouraging more people to buy in our auctions. The Indian equipment market is huge with many big and small players, and although many businesses already buy and sell at Ritchie Bros, we are still growing our awareness everyday.
How do you assess the auction and rental market for construction equipment in India?
Generally, the increase in construction projects in India has favourably impacted the rental market. One thing some rental companies are struggling with however, is keeping the right balance in their rental fleets. Growth can come with pains, and many businesses rather focus on their growth than on their pains. The result is that there's a need for flexible fleet management solutions that can up or downsize fleets efficiently while getting great returns on investment. The live auction concept is still relatively new in India but with Ritchie Bros' multichannel platform solutions, we offer much more than just the live auctions. With our regular online-only auctions on IronPlanet and our reserved online marketplace Marketplace-E, buyers and sellers have great solutions available wherever they are located.
What are the challenges you experience in the Indian market?
Buying and selling at auctions is still a relatively new concept in the Indian market. Often when people see what we do, they get excited and we start explaining in detail how it works. When they see the potential of the auction method, they often return again and again whenever they need to buy or sell. There are also specific needs and circumstances for businesses that need to sell equipment. Some have longer decision-making processes which can impact the market momentum. By looking at our data and utilising our market expertise, we can get very specific when it comes to selling equipment. Good timing and the right location can make all the difference.
As compared with the global market, where is the Indian market for auction lagging? What are the steps needed to streamline the segment?
As mentioned, the auction concept is relatively new in India and there are both awareness and educational components to this segment. There are simply no shortcuts to growing a market of this magnitude and diversity, and we are taking it one step at a time. It is a very rewarding experience to help businesses find their success in our auctions, whether they are returning or they are totally new to us.
What are the emerging opportunities for rental and auction here?
There is a vibrance in the rental sector but it always has an impact on fleet management. Auctions are an interesting platform to adjust fleets efficiently and effectively. Another aspect is this; looking specifically at rental equipment, a distinction can be made between products manufactured in India or imported. In many rental company fleets, you will see trucks, trailers and small to medium-sized equipment that are manufactured locally. Besides condition and hours, brand recognition can impact the selling price of a used equipment. Auctions attract local and international bidders that compete for the items, which is a favourable situation for rental companies that are selling. Other equipment types that rental businesses import, such as lifting equipment, can have a broader international brand recognition and see even more demand from other countries. Selling in the auction will consolidate many benefits and provide better returns at minimal effort for the seller.
What are your future plans for the Indian market?
India continues to be an interesting market where we can make more meaningful, rewarding partnerships. We value and nurture our existing relationships and continue growing our customer base. Ritchie Bros, especially with our multichannel platform, is capable of becoming the asset disposal solution of choice for sellers and the first choice for those looking to buy machines at a fair price using a reliable, easy and transparent model. Our sales representative, Kiran Dileema is our man on the ground, meeting customers and helping them out with their equipment needs. Lastly, Ritchie Bros will be exhibiting at the bauma CONEXPO India 2018 and is looking forward to connect with a lot more new businesses.