Select Location

Online Auction and Bidding in India

Online auctions are conducted over the internet, to enable quicker and more profitable sales which are not only advantageous but ease out on efforts and costs involved. Read more.
Written by:
Swati Shalini
Published on

Online auction is at an elementary stage in India and witnessing growth with a rampant growth in this digitised environment. In today’s world, where everyone is internet friendly, online auctions help in buying and selling property at favourable prices. Until recent times, physical auctions of property like cars, houses, artwork, etc was conducted, by posting newspaper advertisements and making arrangements for serious potential buyers and sellers to assemble at a given venue. 

However, lack of awareness and immense efforts involved in conducting such mainstream auctions, often failed to result in the expected sales or, for that matter, getting the appropriate quotations for the property on sale.

What is Online Auction?

Online auctions are conducted over the internet, to enable quicker and more profitable sales which are not only advantageous but ease out on efforts and costs involved. Unlike the traditional buying and selling, where sellers decide the price and the buyers purchase something at that pre-decided price, online auctions help the buyer quote price for a property and it is at the option of the seller to sell or not to sell the property at that price or sell it to the highest bidder. 

Online auctions and bidding are expected to be a greater success as they take place in the virtual world and anyone can make their bid for their desired property, with a real hope of acquiring them at very favourable prices.

Is Online Auction and Bidding Legal in India?

Online auctions are in the form of e-contracts. E-contract is a contract constitutes, specified, executed and deployed by a software system. In an auction, call for bids act as an invitation to offer. The bids made by the persons at the auction act as offer and it is at the auctioneer’s discretion to accept or reject the offer. On acceptance, the offer turns into an agreement, where the buyer agrees to buy a certain property on payment of a certain consideration. Since all the elements of a valid contract are present, online auctions are legal contracts.


How to run an Online Auction in India?

Online auction or e-auction acts as a virtual flea market with an endless range of goods ranging from cars to clothes, residential plots and even sick industries from around the world, and they give sellers a medium to contact infinite number of buyers at the same time. 

There exists a similarity between the local auctions and online auctions. Just like the local auctions, there exists sellers and bidders and potential winners and losers. Winners, on winning the bid, are expected to pay the consideration at the conclusion of the online auction. These are the only similarities that exist between a local and an online auction. 

To run an online auction in India, the following procedure must be followed:  

1. Registration at online auction sites: The first step for both the buyer and seller before participating in an online auction is to register on an online bidding site. Registration is required in order to keep a track of the items you bid on or sell. The seller meets the potential buyers with the competitive bids.

2. Listing of the item by the seller on the online auction sites: The seller lists one or more items for sale on the bidding site and sets up a starting price for bidding. The seller is expected to give a complete description and specifications of the items on sale. Mostly, a specified time period is set up for bidding. In some cases, the bidding process takes place live where on a specific date at a pre-specified time period, bidders log-in with their IDs and place their bids.

3. Bidding on online auction sites: Buyers visit the website, select the preferable item and bid on them during the online auction duration.

4. Online Bidding: The online bidding for each auction closes at the specified time. In the case of multiple bidders, the bidder with the highest online bid at the end of auction is likely to buy the items. If there is no online bidding at or above the reserve price, the auction closes without a winner. At the end of a successful online auction, the buyer and seller communicate over an email to arrange for payment and delivery of the goods.

The sale is at the discretion of the seller. It is the choice of the seller to sell or not to sell the item to the highest bidder. Buyers may have multiple payment options depending upon the auction platform, that includes credit card, debit card, net-banking, cash on delivery and EMI, etc.

What are the types of Online Auctions in India?

There are generally two types of internet auctions: 

  1. Business-to-person, in which sites have possession of the items being offered
  2. Person-to-person, in which individual sellers or small businesses offer their items for auction directly to consumers. Generally, the seller, not the site, has physical possession of the items on sale and is directly responsible for the sale.

What are the Benefits of Online Auctions and Online Bidding in India?

E-auction offers a variety of benefits to both the buyer and the seller. These include-

  • Ease- The buyers can choose the item to bid on and can bid while sitting anywhere, just with the help of an internet.

  • Transparency- In order to conduct a transparent bidding, the sellers provide a comprehensive description of the item on sale.

  • Competitive prices- Buyers get an opportunity to compete with other potential buyers and get attractive prices.

  • Expansion- A seller can expand his reach by conducting an online auction, as over the web he can contact a large number of potential buyers together.

  • Handsome returns- A seller can get handsome returns by selecting the most appropriate bid for his item.

  • Quick and easy- E-auctions are easy, quick and also saves on the pocket.

What are the Drawbacks of Online Auctions?

Lack of awareness- People lack awareness about online auctions and online bidding. There is lack of availability of internet options in remote areas.

Potential threats- Even though online bidding process is transparent, one cannot eliminate the chances of fraud when entering the online bidding market. Therefore, a strong background check is required by both the buyer and the seller, before indulging in the process.

What to do in case of Online Auction fraud? 

With growth and advancement in technology and the internet, the online auctions process can reap multiple benefits. Online auctions have a tremendous future, considering the massive benefits they have such as ease, transparency, and efficiency, they bring to both the buyers and sellers. It is important for buyers to perform a strong background check of the online auction site, and existing buyers and sellers on the online auction site before indulging in the process.

If you fall victim to online auction fraud in India, you can consult a cyber lawyer and file a complaint about online fraud with the cyber crime cell in your city. Need to talk to a cyber lawyer in India? Contact MyAdvo and connect to the best cyber crime lawyers in India. Email us at or call us at +919811782573.