Local online auction houses have denied claims their sites are nothing more than short-term solutions to build Web traffic.
The claims were made by Chris Hawkes, general manager of Melbourne-based Web solution provider Ocean Internet, which recently shut down its Auctionshop site, launched last year.
Hawkes, former general manager of Fairfax's Citysearch, claimed online auctions were a gimmick and an American fad flooding the local market.
He said one of his first decisions after taking up his position with Ocean Internet three months ago was to close the Auctionshop site and re-evaluate its worth.
"I don't believe online auctions are really relevant in Australia with such a small population. I don't think that this is where the Internet is heading."
Hawkes believes online auctions will have to target increasingly specific audiences if they are to be successful in the future.
However, independent auction site Stuff.com's managing director, Simon Van Wick, believes there are real opportunities for Australian auction sites to be successful in the future.
Although Van Wick admitted the site was "struggling" to maintain a high level of content, he said Stuff.com's aim was to establish a community of traders who regularly exchanged goods on the Web.
"It takes a while for people to get used to the idea. It took people a while to get used to them in the US where it was slow for about the first two years," Wick said.
He said Stuff.com was performing ahead of business plan projections for users and product listings. The site has around 20,000 users and 12,000 product listings, he said.
The general manager of Gofish Online Auctions, Menno Veeneklaas, said the perception that auction sites were a short-term traffic solution was "narrow".
Veeneklaas said Gofish Auctions was operating as a business that gave consumers control over price and an entertaining environment in which to shop.
While Veeneklaas admitted the online auction space was "very competitive", he said the site was working to increase its traffic and to sell a high percentage of its items.
He said 120 companies had agreed to sell their products through Gofish and that the site had been listing between 800 and 1500 products a week since it launched three weeks ago.
Meanwhile, eBay's Australia and New Zealand managing director, Alison Deans, said the local arm of US-based eBay had experienced consistent growth since its launch.
She said eBay had 12,000 registered users and more than one million items available to Australia through its sites globally.