June 23, 2021

Conversations: A Pioneering Auction Company Shows the Way to China

When Ms. Weidenhamer first picked up a gavel in 1995, there were few female auctioneers. Since then, she has helped invigorate the ancient profession and built her company, Auction Systems Auctioneers and Appraisers, to more than $100 million in annual revenue. She has added new formats, like simulcasting her live auctions, and she has helped establish that auctions are not just for liquidations and closeouts. She has even taken her gavel to China, where she has mastered enough Mandarin to handle auction chants and where she is creating a new channel for Western companies to introduce products into the vast Chinese market.

She discussed all of that, from a dozen time zones away in Shanghai, in a conversation that has been condensed and edited.

Q. How did you get started in the business?

A. I was working in San Francisco doing merger and acquisition arbitrage work. My husband worked for American Express in Phoenix. So I commuted back and forth to Phoenix every week. On a flight one night I sat by a man in his 80s who was an auctioneer, and he started telling me about the kind of work he did and how big the auction industry was. A month later I resigned my position and signed up to go to auction school.

Q. How many years ago was that and how old were you at the time?

A. I’ll tell you how many years ago it was. It was 18 years ago. I was basically told: go find product and if you find product, we’ll let you sell it when you bring it to the auction. I think they thought I wouldn’t find anything.

Q. Was this test a way to keep you out of the industry?

A. Right. There were very few women in the business. For some good reasons, women in the auction industry have always struggled. It’s really because a high-pitched voice is extremely hard to listen to for hours. Plus, it was an old boys’ network. The first things I found and sold were surplus computers.

Q. Since then, what kinds of things have you auctioned off?

A. Everything from multimillion-dollar haunted mansions to gold teeth recovered from safe deposit boxes.

Q. Have you said no to anything?

A. We do have standards, things we won’t sell — like pornographic material.

Q. Why did you call your company Auction Systems?

A. Back in 1995, it was a very ma-and-pa industry that seemed to lack consistency and systems. I wanted to offer a consistent experience to both the seller of goods and the buyer of goods.

Q. What did your business look like at the start?

A. I started by myself with a little, 6,000-square-foot warehouse in downtown Phoenix. I conducted the auctions right there. A lot of auction houses have stages, so without one, I bought a step ladder and stood on the ladder and would sell.

Q. What did your husband think when you told him you weren’t going to commute to San Francisco any more — but you were starting an auction company?

A. Honestly, he thought I’d lost my mind.

Q. How long until he realized otherwise?

A. I’m not 100 percent sure he’s convinced yet. I started in October of the first year and did about $150,000 in commissions by year’s end. Typically our commission is about one-third of the sale price. In 1996 we did about $1.5 million. I had three employees unpacking and tagging goods and helping with accounting and sales support.

Q. Where’s the business today?

A. Annual revenues are about $135 million and we’ve got 200-plus employees. We’re now in a huge warehouse with about 150,000 square feet on four acres, but we also do auctions all over.

Q. Is $135 million the total amount of goods you’ve sold — or is that your commission?

A. The commission.

Q. How do you explain that kind of growth?

A. Growth is a combination of good processes, great people and operating outside the traditional parameters of auctions by looking for all kinds of opportunities — everything from real estate to microbrewery products to the latest technology. People value the open-market transparency that auctions create.

Q. When did auctions become a distribution channel for everyday merchandise?

A. I think we were pioneers — the idea that auctions are a first resort and not a last chance.

Q. Explain that.

A. Manufacturers right now are primarily represented in big-box retailers, so they create their products, consign them to the big-box retailer and then wait to be paid — often four to six months. Let’s say you’re a bicycle manufacturer. With an auction, you can consign a large number of bicycles to the auction. We’ll sell them, and you will get paid in three weeks. Oh, and by the way, they will sell for much more than you’d get from that big-box retailer.

Q. Why?

Article source: http://www.nytimes.com/2013/09/05/business/smallbusiness/a-pioneering-auction-company-keeps-innovating.html?partner=rss&emc=rss

Inside Asia: Fears of Tainted Food Push More Chinese to Shop Online

BEIJING — Chinese consumers are responding to a powerful new marketing tactic that plays to a widespread fear of food contamination: the promise of safe groceries sold online.

With pledges to supply produce directly from the farm, vendors have found that food is becoming one of the fastest-growing segments of Internet retailing. They are benefiting from scares about products like cadmium-tainted rice and recycled cooking oil.

The trend is adding momentum to a Chinese online retail boom driven by a rapidly expanding middle class, with companies like Cofco, one of China’s top food processors and traders, and S.F. Express, a leading shipping company, betting that a segment of a population of 1.3 billion will pay for the peace of mind they say their services offer.

“I think people are willing to pay a higher premium than in the West. In other markets, like the U.K., food e-commerce is about convenience. Here, there’s going to be a higher quality and safety premium,” said Chen Yougang, a partner in Shanghai at the consulting firm McKinsey Co.

But convincing some skeptical Chinese consumers about food quality will remain a battle. Zhang Lei, a mother of one who lives in Shanghai, expressed doubts about some products being touted as organic.

“Everyone knows that in China, organic is not the real thing,” Ms. Zhang said.

Nonetheless, total online sales of fresh produce in China could rocket to 40 billion renminbi, or $6.5 billion, in five years, from about 11.5 billion renminbi in sales this year, said Zhou Wen Quan, a senior analyst at the Beijing Orient Agribusiness Consultant firm.

The research firm Euromonitor International has more modest expectations, but still sees growth comfortably beating major overseas markets. It looks at volume rather than the value of online purchases of fresh food, with the Chinese market expected to grow about 8 percent by 2017, from 660 million tons this year. In comparison, the U.S. market is expected to grow about 5 percent, from 75 million tons.

So far, most food sold on China’s largest online shopping sites, like Yihaodian — majority-owned by Wal-Mart Stores Inc. — and Jingdong Mall, has been packaged items or fruit with a relatively long shelf-life.

But new businesses are focusing on fresh and premium produce, using the Internet to focus on higher-income consumers. Supermarkets typically serve a broader customer base, analysts say.

“The vegetables are really fresh,” said a Beijing resident, Lei Na, who had shopped on Web sites like Womai.com, owned by Cofco. “Supermarket food doesn’t look that fresh, especially if you only get there in the evening.”

The S.F. Express group introduced a program last year that offers a range of food to about 500,000 consumers. About 70 percent of the food is imported products like wine and milk powder, but the company also sells local seafood, meat and vegetables.

“We go directly to the farms to pick the produce, and then using our own logistics, deliver straight to the consumer,” said Yang Jun, director of sales and marketing at S.F. Express. “So from the tree to the consumer’s dining table, we’ll remove all the sectors in between.”

Convincing customers they can meet promises on food safety is crucial for online retailers.

“If I’m busy I use Web sites. But if I have time, I prefer to drive to the supermarket and choose vegetables myself,” said Ms. Zhang in Shanghai.

But vendors say cutting out middlemen increases freshness and makes food more traceable, while packaging barcodes that can be read by smartphones help consumers verify the origins of items.

And online retailers go to some lengths to describe their products on their Web sites. Customers looking at free-range chickens on the Benlai Shenghuo Web site — a 2012 start-up whose name roughly translates as “original life” — can get details on the breed they are selecting and its diet, along with photographs of the birds wandering on farms.

Online customer reviews and ratings are also important in convincing buyers of quality, said Chen Liang, a senior research expert at Alibaba, the company that owns one of China’s largest online marketplaces, Taobao. With 10 million users per minute, Taobao has ridden the e-commerce boom in China, with customers moving from nonessential items, like books and electronics, to clothes and recently food. Its sales of meat, seafood, fruit and vegetables grew 42 percent last year to nearly 1.3 billion renminbi.

“Before, people thought the Internet wasn’t suitable for selling clothes. But now it’s the most suitable channel. I think food will follow this trend,” Mr. Chen said.

Another major challenge facing e-commerce food companies is the cost of developing nationwide cold chain logistics, with Mr. Chen of McKinsey suggesting that industry players should work together to connect suppliers with a network of cold-storage facilities.

But with the many recent food scandals in China — products from the New Zealand dairy exporter Fonterra have just been recalled from Chinese shelves — companies are confident they can overcome hurdles in the market.

“During the bird flu outbreak, our chicken sales exploded,” said Steve Liang, founder and chief executive of the Shanghai-based online retailer Fields, referring to a new strain of the virus discovered in February that killed more than 40 people in China and Taiwan.

Article source: http://www.nytimes.com/2013/08/13/business/global/fears-of-tainted-food-push-more-chinese-to-shop-online.html?partner=rss&emc=rss

U.S. Treasury Secretary and Chinese President Meet

Mr. Lew, 57, a master of the intricacies of the United States budget who has less foreign experience than his predecessors, raised the topic of cybersecurity, a significant issue in the relationship between Washington and Beijing, American officials said. He also talked about North Korea’s nuclear program, a topic not normally on a Treasury secretary’s agenda, they said.

Mr. Xi noted that while the United States and China had “enormous shared interests, of course, unavoidably we have some differences.”

It has been unusual for Chinese leaders to draw attention to stark divisions with the United States. Mr. Xi’s choice of words showed confidence that he could manage the problems, and hinted at a lowering of expectations about developing a strategic relationship with the United States, an idea that had been proffered in the past, diplomats here said.

Contacts between Washington and Beijing have been sparse over the past three months during China’s protracted political transition. It began in November when Mr. Xi took over as head of the Communist Party, and ended last week with his ascension to the presidency at the annual session of the National People’s Congress.

For reasons of protocol, President Obama did not speak with Mr. Xi until last week, when he called the new Chinese president to congratulate him and to outline the issues at hand, including North Korea and cybersecurity.

The White House has directly accused China of widespread theft of data from American computer networks, including those of American businesses involved in the Chinese market. China’s cyberespionage against American commercial interests has attracted strong attention in Congress that could have negative consequences for China, analysts said.

“If we don’t see progress, that could increase the prospects for a political backlash that would lead to greater scrutiny of Chinese investment in the United States,” said Myron A. Brilliant, senior vice president for international affairs at the American Chamber of Commerce in Washington.

On North Korea, the Obama administration wants to know whether Beijing will enforce the new sanctions that the United Nations Security Council imposed on the North, with China voting in favor. The administration has also announced an expansion of missile defense capabilities in an effort to deter North Korea, a message that implied that China should restrain its nuclear-armed ally or face an expanding American military focus on Asia.

Mr. Xi appears to have gone out of his way to ensure that he met Mr. Lew before leaving Friday for his first foreign trip as president, which will include two days in Moscow, followed by a three-nation tour of Africa. Mr. Lew is the first foreign official Mr. Xi has met as president, and Mr. Xi endowed some meaning to his phrase to Mr. Lew that he attached “great importance” to the relationship between China and the United States.

At the same time, however, Chinese commentators have noted that Secretary of State John Kerry chose to make his first trip abroad an extended journey to Europe and the Middle East, unlike his predecessor, Hillary Rodham Clinton, who visited Asian nations first, including China. Mr. Kerry is expected to be in China next month as part of an Asian tour, administration officials said.

This trip is Mr. Lew’s first to China, according to administration officials. The previous two Treasury secretaries, Henry M. Paulson Jr. and Timothy F. Geithner, were experts on China, and for the past seven years they played dominant roles in the relationship between the countries.

Mr. Lew arrived in Beijing on Tuesday morning and went almost immediately to the Great Hall of the People. He was accompanied by an under secretary of the Treasury, Lael Brainard, and a senior official of the National Security Council who specializes in China, Evan Medeiros.

As Mr. Lew and Mr. Xi sat side by side in large, white-upholstered armchairs, Mr. Lew stressed in comments caught by reporters that the United States had seen 14 quarters of economic growth, that the housing market was “coming back,” and that a “revolution” was under way in the energy sector, a reference to shale gas production. After that, reporters were ushered out.

The meeting lasted about 45 minutes, according to Mr. Lew’s aides. The secretary stressed the need for a relationship marked by “healthy competition rather than strategic rivalry,” a Treasury Department statement said.

Later, Mr. Lew met with Xu Shaoshi, the new chairman of the National Development and Reform Commission, the powerful agency that manages the domestic economy. He was scheduled to have dinner with the new finance minister, Lou Jiwei, and Wednesday he is to meet with China’s new prime minister, Li Keqiang.

For his first lunch in China, Mr. Lew repaired to the Bao Yuan Dumpling House, an informal restaurant with laminated tabletops close to the United States Embassy.

There, with two staff members, he ate a variety of the house specialties, using chopsticks. The bill: 109 renminbi, or roughly $6 a head.

This article has been revised to reflect the following correction:

Correction: March 19, 2013

An earlier version of this article misspelled the surname of a senior official of the National Security Council. He is Evan Medeiros, not Madeiros.

Article source: http://www.nytimes.com/2013/03/20/world/asia/us-treasury-secretary-and-chinese-president-meet.html?partner=rss&emc=rss

European Solar Importers Defend Chinese in Anti-Dumping Case

BRUSSELS — Importers of inexpensive solar panels from China said on Tuesday that imposing tariffs would lead to hundreds of thousands of job losses in the European Union, the biggest export market for the Chinese equipment.

The claims by the Alliance for Affordable Solar Energy, a coalition of companies that install and service panels, were aimed at stopping the European Commission from imposing penalties in the biggest trade case of its kind in terms of value.

The association presented its evidence on Monday at a hearing with the commission, which opened a case in September to determine whether the Chinese were selling solar equipment for less than the Chinese market price.

The antidumping case covers exports from China worth 21 billion euros ($28 billion) in 2011. The commission will decide by June whether to begin imposing provisional duties in the antidumping case. It began a second investigation in November into whether the Chinese government was unfairly subsidizing panel makers.

The cases have split the solar sector. European manufacturers are adamant that Chinese practices are illegal under international trade rules, and they are pushing the commission to take measures to save an important component of the clean energy industry. But installation and service companies represented by the alliance say the best way to promote clean power in Europe is to procure commodity products like panels from China and from other low-cost manufacturers.

Thorsten Preugschas, chief executive of Soventix, a German company that builds and operates solar plants worldwide, said at a news conference Tuesday that tariffs of 60 percent would lead to the loss of as many as 242,000 jobs over three years. He said Prognos, a consulting firm, had conducted the study.

Underscoring his sector’s reliance on Chinese imports, Mr. Preugschas said Soventix bought about 80 percent of panels from Chinese manufacturers last year because prices were as much as 45 percent lower than those purchased from some manufacturers in Europe.

Mr. Preugschas said that Chinese factories could sell cheaply because of their size. The difference was “economies of scale,” he said, and so the “big manufacturers have a price advantage, and it doesn’t matter where in the world they are located.”

A group of solar equipment makers, including SolarWorld, a German company that is among complainants in Europe and in a separate case in the United States, fought back Tuesday, saying that unfair practices had already meant thousands of lost jobs and 30 bankruptcies in Europe.

The study carried out by Prognos “applies mathematical trickery” to reach its estimate of how many jobs would be lost once tariffs were applied, Milan Nitzschke, the president of the group, EU ProSun, said in a statement.

Mr. Nitzschke also said that prices for consumers were stable or had even decreased in the United States and that the number of installations had grown, even after the American authorities imposed tariffs on Chinese solar products.

“Only fair competition keeps jobs in Europe and leads to a development of the solar energy in the E.U.,” Mr. Nitzschke said.

The United States imposed duties on billions of dollars’ worth of solar products from China over the next five years to shield American producers from lower-priced imports. The European case would be four or five times as large by value, partly because of the scale of the industry in Europe, where many governments offer incentives to install panels in homes and offices.

John Clancy, a spokesman for Karel De Gucht, the European trade commissioner, said his department would not comment on potential job losses from tariffs because the case was continuing. But Mr. Clancy said the “overall economic interests in the E.U.” would be taken into account during the investigation, including importers and industries that use imported products.

Article source: http://www.nytimes.com/2013/02/20/business/global/european-solar-importers-defend-chinese-in-anti-dumping-case.html?partner=rss&emc=rss

Saab Gets New Lifeline From China

PARIS — Saab Automobile was thrown a lifeline in a deal announced Tuesday through which a Beijing-based company will take a stake in the struggling Swedish carmaker, provide a loan to help it restart production, and open access to the booming Chinese market.

Hawtai Motor will provide €150 million, or $223 million, in new financing, including €120 million for a 29.9 percent equity stake in the Dutch company Spyker Cars, which bought Saab from General Motors last year. In addition, Hawtai will provide a €30 million convertible loan with a six-month maturity at 7 percent. The deal also includes joint ventures in manufacturing, technology and distribution in China.

“I would hope that all things being equal, we have seen the last of the growing pains,” Victor R. Muller, the Spyker chief executive and chairman of Saab Automobile, said on a conference call from Beijing. China will soon be “our second home market.”

The agreement comes after increasingly fraught efforts by Saab in recent weeks to remain afloat as it drained its cash reserves and left suppliers in Sweden unpaid. Production has been halted since early April; Mr. Muller said operations should be restarted early next week.

On Monday, Spyker said that it had secured short-term loans of €59.1 million. That includes a €30 million, six-month convertible loan from Gemini Investment Fund, one of Spyker’s shareholders, and an additional €29.1 million from a loan made by the European Investment Bank.

Mr. Muller said that he still hoped that a Russian investor, Vladimir A. Antonov, will again become a Spyker shareholder in the future.

When G.M. sold Saab to Spyker early last year, it blocked Mr. Antonov, who had owned part of Spyker, from participating in the deal amid allegations of suspicious financial dealings.

Last week the Swedish National Debt Office, which guarantees the loan facility from the E.I.B., cleared Mr. Antonov to reinvest in the company. “He’s as clean as a baby,” Mr. Muller said. G.M. said it had reached a “tentative agreement” to the same effect, subject to conditions, although the E.I.B. has yet to confirm whether it will follow suit.

With the Chinese deal, Spyker no longer urgently needs to raise cash by selling property to Mr. Antonov, Mr. Muller said.

But assuming Mr. Antonov is given final clearance, he would then be free to invest in the company, and buy shares from existing shareholders, Mr. Muller said. He added: “We’ll see how it pans out.”

Through the deal, Saab’s next-generation 9-3 will be made under license in China from 2013, while Saab will also export to China from its plant in Trollhattan, Sweden. Saab is contractually barred from allowing its 9-4X and 9-5 models, which were developed with G.M., from being produced in China.

The partnership with Hawtai allows Saab “to continue executing its business plan,” after securing the required mid-term financing, Mr. Muller said. In addition, he said, “it allows Saab Automobile to enter the Chinese car market and establish a technology partnership with a strong Chinese manufacturer.”

Hawtai, which is privately owned, was founded in 2000. It has two plants in China and an annual production capacity of 350,000 vehicles; it also makes diesel engines and transmission systems. It is ramping up capacity and says it plans to produce 1 million vehicles a year by 2015.

In a statement, Richard Zhang, vice president of Hawtai, described Saab as an “iconic” brand and said the deal would give his company access to innovative technology and an international network, which would otherwise “have taken us decades to build.”

He added that Hawtai was committed “to the future of Saab Automobile as a premium European car manufacturer.”

Hawtai previously made cars in a venture with Hyundai of Korea and from 2007 it started building under its own badge. According to Chinese news reports, it has also has mining rights at coal mines in Mongolia and is in the process of investing in Bank of Beijing. A Hawtai representative will take a seat on Spyker’s board, which will hence increase in size to four members from three.

The deal marks the second time that a Chinese group has bailed out a Swedish carmaker. Zhejiang Geely Holding, China’s largest privately run automaker, agreed last year to buy Ford Motor’s Volvo unit.

General Motors sold Saab to Spyker in 2010 for $74 million in cash and it also received Saab preference shares with a face value of $326 million, giving it a continuing voice in the Swedish automaker’s future. Spyker said that the Chinese investment did not need to be approved by G.M.

The latest deal is subject to approval by Chinese government agencies, the European Investment Bank and the Swedish National Debt Office.

In Amsterdam, Spyker shares rose 16.3 percent to €4.93.

Saab employs 3,800 people, mostly at the Trollhattan plant. Several thousand jobs at supply companies also depend on Saab.

Article source: http://feeds.nytimes.com/click.phdo?i=ca2b6a4cef2127dc2c7c23764b24d88f