Over the past 24 months, we have witnessed dramatic changes in the art world. As art fairs, galleries and museums scramble to enter the digital realm, digitalization has gradually shifted from a last resort under the pandemic to a clear and viable future trend. In the process of finding and changing new business models, China's auction industry, especially modern and contemporary art auctions, has taken the lead and has become the biggest beneficiary of the epidemic so far.
2011-2021 China Index Auction House Modern and Contemporary Art Section Transaction Trend Chart
Source\Drafting: Artron Art Network
(2021 Index Auction House List: Sotheby's Hong Kong, Christie's Hong Kong, Hong Kong Phillips, China Guardian, Beijing Poly, Beijing Yongle, Huayi International, Guardian Hong Kong, Poly Hong Kong, Xiling Auction, Kaipai International, Beijing Hanhai, Zhongmao Shengjia, Beijing Chengxuan, Beijing Rongbao)
Let's start with a set of data. In 2021, the total turnover of modern and contemporary art in China's 15 index auction houses exceeded 12 billion yuan, breaking through the 10 billion mark for the first time, an increase of more than 50% over 2019 before the epidemic. Among them, the turnover of the Hong Kong market rose by HK$2.16 billion year-on-year, an increase of 37%, while the turnover of the mainland soared by 2.26 billion yuan, an increase of more than 120%.
The travel and social restrictions brought about by the epidemic have become the impetus for the unprecedented growth of modern and contemporary art auctions, and the growth rate has surpassed the traditional strong plates such as calligraphy and painting, porcelain miscellaneous, etc., and has become a new growth point for major auction houses.
However, under the general upward trend of song and dance, the growth logic of Hong Kong and the mainland has a significant difference, which also represents the two most mainstream price growth paths in the current market. The reason why modern and contemporary art auctions can break through from the epidemic is inseparable from mastering the various factors of time, place, people and people.
◆ Hong Kong: Westernization, globalization, homogenization
In 2021, most of the sky-high lots that brush the screen in the circle of friends are from Hong Kong, and most of them are Western masters' works, reflecting the true face of the current Hong Kong market.
In 2020, the offline physical preview caused by the epidemic was blocked, which brought certain troubles to the sales of works in the top market. But on the contrary, the mid-market, especially the relatively small risk of authenticity and falsehood, modern and contemporary art that is more in line with screen viewing habits has shown a vigorous development trend in the crisis, and has also cultivated the habit of collectors to buy art directly through online auctions and social media without physical preview. (The boom in online trading has become a cliché in reports issued by major institutions last year, and I will not repeat it here.) ）
According to the 2021 Art Basel UBS Global Art Market Report, online sales already accounted for 37% of total sales among dealers in 2020 – more than double the 2019 figure. Moreover, 64% of dealers said that the trend of online sales will continue to develop in the future.
Synchronized with the normalization of online transactions, there are also the global synchronous live broadcast and telephone commissions of Hong Kong, New York and London evening auctions, Hong Kong is facing more global customers than ever before, so the choice of lots has to be more global, and more and more high-priced works by Picasso, Baszia and Richter appear in Hong Kong. Among them, Baschia was the most popular in 2021, with a total of 8 paintings auctioned in Su and Jia throughout the year, 3 more than 200 million Hong Kong dollars sold, and 1.19 billion Hong Kong dollars were sold, and one person contributed 15.5% of the total transactions of the two auction houses.
Top 5 high-priced lots in Baschia in Hong Kong in 2021
According to the official 2021 annual results report released by Sotheby's and Christie's, the total annual turnover in Asia has reached a record high and has steadily increased in the past few years. Among them, Western art accounts for more than 50% of the modern and contemporary art market, surpassing Asian art for the first time.
"In the past, it was very difficult to persuade collectors to photograph their works in Hong Kong," Yuki Terase, a former head of contemporary art in Asia at Sotheby's, recalled in an interview with Art News. This is absolutely impossible. And just a few years later, consignors will now even take the initiative to ask auction houses to auction their collections in Hong Kong.
Pablo Picasso, The Woman on the Knee
Oil on oil, Lippling glazed lacquer canvas, 92.2x73cm, 1954
Sotheby's Hong Kong Autumn Auction 2021
Transaction price: HK$191.6 million
Set a new asian auction record for artists
Although behind "globalization", there is another trend of "homogenization". "Regional characteristics are weakening, the same audience from all over the world, similar auction structure, no matter where the shooting starts (it is the same)." However, in the high-end market, people continue to see wonderful live auctions and live broadcasts in 2021, while in the low-end market, more and more works will be carried out through uninterrupted online transactions throughout the year.
The cake of the Hong Kong market is getting bigger and bigger, and more and more people are sharing it.
◆ New Generation Raid Shooting
Young Asian collectors, the most ardent advocates of online trading, have become the main traders in the current market by surprise in the post-epidemic mass emergence. In this wave, they have also been shaped by online communication and trading methods.
"The average age of my collectors is probably 30 to 40 years old, and many of them are entrepreneurs who want to make decisions quickly." Yuki Terase said social media such as WhatsApp, WeChat, KaKaoTalk, Line, Instagram and others have been the main ways she communicates with them in recent times.
Auction Is also often the first stop for young buyers to start their collecting journey. The advantage of a public auction is that the bidding process is transparent, which helps new entrants build confidence in pricing before attempting primary market or private bargaining, while also allowing galleries to see their strength without being placed at the end of the waiting list. For example, in the Beijing Yongle Autumn Auction, a young collector after the 90s shot boldly on the spot, and finally won Jia Aili's "Purple Crazy Scene" for 16.1 million yuan.
In the August 2021 "Jay Chou x Sotheby's" evening auction, Jay Chou's Jean Mitchell Basquiat's "Untitled" sold for HK$289.3 million, which is also the third collaboration between Sotheby's and Asian entertainment stars. Image source: Sotheby's
Despite their recent involvement in filming, the younger generation is more dynamic and aggressive than their predecessors. "Asian collectors are very strong right now. They are already becoming key factors in defining current tastes and trends. This has only happened in the last two years. Once, Asia would look to the West to see what other countries were buying; now, they play a key role in defining market demand. Yuki Terase said.
In 2021, the Hong Kong market witnessed many new records for the post-70s and 80s hot rising star Stone, such as Huang Yuxing, Matthew Wong, Amoako Boafo, Avery Singer and Emily Mae Smith. While this is inextricably linked to high dollar inflation, increased funding into the art market, and a surge in collecting and speculative demand for emerging artists, some of the radical, even irrational, spending behaviors of young Asian collectors are staggering enough.
Amoako Boafo
"Hands Up"
Oil painting cloth 187×148.6cm 2018
Christie's Hong Kong Autumn Auction 2021
Price: HK$26.65 million (new record)
Many of the young and new riches that are emerging today have gained rapid and huge wealth by relying on the accumulation of the previous generation, or the huge gap in information and skills, so the observation period of the collection has been greatly reduced. Most of the previous generation's establishment and growth of the art collection system is usually accumulated "year by year", but the new generation of collectors is accumulated "month by month". New generations of collectors may trust their intuition and the numbers on their phones more than the so-called "academics."
At the same time, the new generation does things faster and more directly, and collecting is a way for them to express themselves and, if necessary, to go down in person. As far as the mainland is concerned, many young collectors have successively founded private institutions or foundations – such as the X Art Museum, the Xiao Contemporary Art Museum, and the Longlati Foundation, which were born in the past two years, which in Terase's view is similar to the development of private institutions in North America.
Founded by Michael Xufu Huang and Theresa Tse, two post-90s generations, the X Art Museum is positioned as a place where young people can give their voices
While the frenzy of young Asian buyers at auctions offers a rosy outlook for the art industry, it may not last long – their enthusiasm is often susceptible to artists' fame, prices, short-term trends and the buying behavior of others, "and there are some risks in that."
Because contemporary art is also a cyclical market, when the market is good, everything can be sold, but when the market begins to adjust, all works of low quality will disappear, and their prices will fall off a cliff. Over the past 20 years, such dramas have been staged many times.
◆ Breaking the inner loop: Western art supporting roles become protagonists
The mainland auction market, with Beijing as its core, has been self-contained for the past two years, in an already somewhat tiresome "internal loop". But with the changes in the economic environment in the second half of the year, and the emergence of the aforementioned generational changes, this seemingly tight closed loop has also had to step out of the comfort zone. Especially in the 2021 autumn auction, this trend of change is more obvious.
Chart of turnover (blue column) and volume (red line) of the Mainland modern and contemporary art market from 2011 to 2021
In 2021, 10 index auction houses in the mainland sold a total of 4.06 billion yuan of modern and contemporary art, a total of 1.5 billion yuan more than in 2011, which is regarded as the peak of auctions in the mainland, setting a record high.
Among them, in the first half of the year, the market was the most popular, with a total of 2.385 billion yuan worth of modern and contemporary art transactions. Due to the unique development of global epidemic prevention, China's GDP increased by 18% year-on-year in the first quarter and 7.9% in the second quarter. At the same time, the world's major economies printed money, resulting in a significant increase in the price of art, so in the first half of the year, the domestic market was frequently exported: a total of 3 pieces exceeded 100 million, and 5 pieces exceeded 50 million yuan. The low-end market is also booming, with an overall turnover of 84%.
Chen Danqing, "Tibetan Group Paintings: Shepherds"
Oil on board 78.6× 52.3cm, 1980
Beijing Poly Spring Auction 2021
Transaction price: 161 million yuan (new record)
However, in the second half of the year, the domestic economic development slowed down, the GDP fell back to 4.9% in the third quarter, for the first time in many years, the fourth quarter fell to 4%, under a cloud of misery, collectors and opponents of high-end art stuck tighter, resulting in the mainland autumn auction of Chinese modern and contemporary art has few big goods, more than 10 million are rare. Overall turnover also slipped to nearly $1.68 billion, but remained higher than any other quarter except the 2021 Spring Auction.
Space is limited
◆ 2022 Modern and Contemporary Auction Market Preview
● Western art.●
From 2022, China will implement zero tariffs on works of art such as oil paintings that have been around for more than 100 years. Although the 14% value-added tax is still the main part of the entry of art, the tariff can be reduced from 12% to 0, and other taxes may not have room for decline. Moreover, the introduction of Western art has become an encouraged behavior of the state, and there is no reason why domestic auction houses should not follow up the layout.
● Chasing deer in Shanghai●
Although Beijing is still the absolute core of the domestic auction industry, with the increasing prosperity and maturity of Shanghai's primary market, the huge incremental market, convenient bonded services and the charm of new customers will inevitably attract the attention of auction houses.
In addition to the effective Huayi, Kaipai and Zhongmao Shengjia, which tested the waters of Shanghai in 2021, Christie's will also restart the Shanghai auction in 2022, followed by Sotheby's also set up a new team in China, if there is further action, Shanghai will certainly be the first choice. The auction giants that have long been entrenched in Beijing have already been gearing up, and the Shanghai auction battle is about to erupt in 2022.
● NFT●
Although it is not mentioned throughout this article, NFT can be regarded as the hottest word in the global art market in 2021, but due to the regulatory environment of domestic virtual currencies, NFT has not made much waves in the Chinese market. From the explosion to the plunge to the second explosion of the meta-universe, there is little talk about the aesthetic value of NFTs, and the main focus is on the huge returns of NFT art in terms of sales this year, and what extendable applications will be developed in the future. Although the country seems to be calm, but in fact, the dark tide is surging and more transactions on NFTs may surface in the future.