Taobao aircraft auction fails to take off

An aircraft auction launched by the nation's leading online shopping platform, Taobao.com, was a crashing failure - at least on the first two days of bidding.

As of 4 pm on Thursday, 30 hours after the auction started, only eight people had bid for an Australian-made light sport aircraft. The plane was offered to pay 1.05 million yuan - about $245,170 - by the last bidder, and nobody had even made any bids for four jets that are also being offered.

The auction involves five new small aircraft, as well as a used helicopter. Prices for the other items range from 1.05 million yuan to 16.8 million yuan.

As of 3 pm on Friday, 61 users had shown an interest in the 3.53 million yuan second-hand helicopter, according to Taobao.

Anybody can take part in the auction after providing a deposit of 2,000 yuan for the Australian-made aircraft or 50,000 yuan for the four jets. No deposit is required for the helicopter, which has a fixed price, according to Li Feng'an from communications department of Taobao.

The aircraft auction will end at 10 am on Monday.

Taobao is a subsidiary of China's largest e-commerce company, Alibaba Group Holding Ltd.

The central government has promised to gradually open parts of the country's low-altitude airspace (altitudes below 1,000 meters) for private flights to promote the general aviation sector.

Yu Nan, an analyst with Haitong Securities Co Ltd, said the online aircraft sale was just another e-commerce market trend.

"The quick development of Chinese e-commerce allows Taobao to sell items ranging from daily necessities to luxury goods," said Yu, adding that people in the United States buy and sell aircraft and even tanks on eBay.

Having a client base of 500 million registered users, Taobao is using its influence to tap into the general aviation sector.

According to Li, Taobao is hosting the aircraft bidding for an aircraft trading company from Beijing, and there are no plans for similar auctions in the near future.

The winning bidders will conduct an on-the-spot examination of the aircraft, and as the Taobao purchase tradition goes, they don't need to pay if they're not satisfied with the goods, said Li.

Yu said the online aircraft auction was a sales tactic with effective advertising. Despite having great potential, the Chinese general aviation industry is still in its infancy.

There are less than 1,000 registered aircraft used for general aviation across the country, while the US has three-fourths of the global total of 320,000 registered general aviation planes.

During the 12th Five-Year Plan (2011-15), the government said general aviation will be one of the pillars of economic development.

Experts forecast China will need about 10,000 general aviation aircraft in the coming decade, which may unleash pent-up demand for private air services and create a market worth 1.5 trillion yuan.