How Hong Kong’s Spring Auctions confirm market resilience and other insights

David Hockney’s 30 Sunflowers sold for HK$114.8 million, achieving the second highest price for any Western art sold at auction in Asia. Image courtesy of Sotheby’s.
Francis Belin, Christie’s Asia Pacific President. Image courtesy of Christie’s.
Matthew Wong has been a much sought after name this season. Phillips Hong Kong  sold Wong’s 2017 oil painting, Warmth, measuring 68 x 50 cm, for HK$2.62 million in their 20th Century & Contemporary Art Evening Sale on 8 July 2020. Image courtesy of Phillips.
Jonathan Crockett, Chairman, Asia, Phillips, notes that the demand for top quality works has not dropped and sales results suggest market resilience. Image courtesy of Phillips.
Top lot at Sotheby’s Modern Art Evening Sale on 8 July 2020: Sanyu, Quatre Nus, circa 1950s, oil on masonite, 100 by 122 cm. Image courtesy of Sotheby’s.
Christie’s ONE Sale kicked off just after 9pm HKT on 10 July 2020. In a relay auction with auctioneers from Hong Kong, New York, Paris and London. [Top to bottom]: Elaine Kwok, Hong Kong; Adrien Meyer, New York; Cécile Verdier, Paris; [Right]: Jussi Pylkkänen, London. Images courtesy of Christie’s.
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CoBo Social Market News Reports

 

Coming off the adrenalin of an action-filled auction week in Hong Kong, Denise Tsui sheds insights on what the sales indicate about our digitally transforming art world.

 

TEXT: Denise Tsui
IMAGES: Courtesy of various

After months of setbacks and postponements, Hong Kong’s spring sales series finally took place, and perhaps more successfully than expected from a pandemic-stricken economy. Of the three big houses, Sotheby’s Hong Kong came in on top reigning in a combined total of HK$1.7 billion (US$220 million) with its Modern and Contemporary Art categories; the silver medal went to Christie’s Hong Kong whose three Modern and Contemporary Art sales sessions brought in a combined HK$968 million (US$125 million); while Phillips Hong Kong realised HK$272 million (US$35 million) through its 20th Century & Contemporary Art & Design sales.

The myriad of evening and day sales—which were both available to attend in real life or streamed online—became extraordinarily ill-timed as the city fell under hefty social gathering restrictions again due to a rising third wave of COVID-19 cases, which began taking effect on 11 July, the day after Christie’s evening sales but not before auction week concluded. But alas, fated or not, the previews went ahead and were met with excitement while the anticipation of the auction room was blissfully welcomed—for most of the week—by those of us starved of IRL action.

After a marathon week chasing sales day and night—my pent-up auction energy now depleted and in need of recharging—I look back on the season to reflect on specific takeaways. Some are surprising, instilling hope for the viability of the art market. Yet other insights cause worry about the path we are heading down in terms of how we consume art.

 

David Hockney’s 30 Sunflowers sold for HK$114.8 million, achieving the second highest price for any Western art sold at auction in Asia. Image courtesy of Sotheby’s.

 

It Ain’t Over Til It’s Over 

The bidding wars that had us gripping our seats—or at least sitting upright on our couch—is an indication that a global health crisis may have slowed down the transaction of art in the first half of the year, but the market is viable to bounce back. A quarterly report by Pi-eX on the first quarter of 2020 reflected a 40% plummet in total combined offline and online revenue across Sotheby’s, Christie’s and Phillips year-on-year from US$1.4 billion in 2019 to US$0.8 billion in 2020. Additionally, earlier reports by Financial Times amongst others, suggested global sales worldwide by the three houses had fallen an alarming 97% in May 2020. Frightening indeed. But what was not yet reflected in these sets of data was the abnormality of the now shifted auction calendar and the time required for auction houses to find their feet again. If the Hong Kong sales—which directly followed New York sales—reflected one thing, it’s the resilience of the Asian market in these uncertain times.

In an email with CoBo Social, Kevin Ching, CEO of Sotheby’s Asia, commented, “Hot on the heels of our ground-breaking live-streamed flagship New York sales that demonstrated the market to be vibrant and well, our rescheduled Spring sales in Hong Kong produced robust results and exceptional performance across all categories.” He further added, “Our highly successful sales series in Hong Kong once again demonstrates the resilience of the Asian market. Undeterred by travel bans, our clients enthusiastically participated through different channels. The pent-up demand and appetite for top quality materials were abundantly apparent.”

Jonathan Crockett, Chairman, Asia, Phillips, shared a similar sentiment: “We believe that demand by collectors for top quality works has not weakened, and our sale results prove that the modern and contemporary art market remains somewhat resilient to the current global health crisis. It is a time of uncertainty in many financial markets, but art seems to be a stable investment at present. And the art market has weathered all manner of periods of uncertainty and hardship over the centuries, yet works of the highest quality remain coveted and highly sought after.”

While Francis Belin, Christie’s Asia Pacific President, noted, “Christie’s Hong Kong sale results show that the market is healthy—our 88% sell through rate this season is historically very high.” He adds, “New price benchmarks were set for major artists—e.g. Sanyu, Gerhard Richter, George Condo—and quality works continue to be highly sought after.”

 

Francis Belin, Christie’s Asia Pacific President. Image courtesy of Christie’s.

 

What Are You Hungry For?

When I was previewing the auctions last week, one happy surprise was seeing that in addition to the usual roster of secondary market favourites, there was also an influx in artists that were lesser seen, with comparatively lower price points being sought after this season, with reasons specific to each artist.

Among the names in demand was Matthew Wong, self-taught Canadian painter who died of suicide last October and whose works are now nearly impossible to source on the primary market. On the coattails of Sotheby’s New York sale of Wong’s 2018 painting The Realm of Appearances, which sold for US$1.82 million, almost 23 times over its US$80,000 high estimate on 29 June, Phillips Hong Kong offered Warmth, created a year prior and at about half the size, selling for HK$2.62 million (US$339,000). Days later, Wong’s 2017 painting titled Homecoming and measuring 100 x 80 cm, hammered at Christie’s Hong Kong for HK$3 million (US$388,964), well above its HK$640,000 high estimate.

 

Matthew Wong has been a much sought after name this season. Phillips Hong Kong  sold Wong’s 2017 oil painting, Warmth, measuring 68 x 50 cm, for HK$2.62 million in their 20th Century & Contemporary Art Evening Sale on 8 July 2020. Image courtesy of Phillips.

 

And of course, in case you haven’t already noticed, for several seasons, demand for Western artworks in Asia, by emerging and established artists alike, have been steadily rising. Christie’s has even ditched their previous separation of modern and contemporary, and to some degree, the differentiation of Asian and Western artists, to bring it all together under one umbrella of Modern and Contemporary Art in an attempt to soften the need for labelling—and perhaps cause lesser confusion for their specialists.

One of the stars of the week was David Hockney’s 30 Sunflowers which was snapped up at Sotheby’s for HK$114.8 million (US$14.8 million), setting the record as the second-highest sum ever paid for a Western artwork on the auction block in Asia. Other Western artists that have been seeing repeat action include Genieve Figgis, Eddie Martinez, Nicolas Party, Jonas Wood and—no surprise here—Daniel Arsham.

Crockett noted, “Appetite among Asian collectors for emerging Western artworks will continue to rise. The Western works offered at Phillips’ July Sales this time produced some genuinely exciting results, with a new world record set for French artist Claire Tabouret, whose Hong Kong auction debut saw its price soar to five times its high estimate.”

So it comes down to, what are you hungry for?

 

Jonathan Crockett, Chairman, Asia, Phillips, notes that the demand for top quality works has not dropped and sales results suggest market resilience. Image courtesy of Phillips.

 

But Some Things Don’t Change

Across all three houses over the week—despite the flush of younger names—one thing became increasingly evident wasn’t about to change because of the pandemic: buyer confidence in well-established, high-flying, market-proven names. While the Gutai and Dansaekhwa craze may largely have come back down to realistic, sustainable terms, in Hong Kong at least, the love for Chinese diaspora artists is yet to dim. Phillips, whose top two lots were Zao Wou-Ki’s 1963 paintings 22.6.63 and 24.10.63, supports this notion. The pair, which arrived at the auction house as sister pictures bearing the same provenance, sold to a single private Asian collection for a combined total of HK$100 million (US$13 million).

At Christie’s and Sotheby’s, the top two lots fell to Sanyu and Zao Wou-Ki respectively. Aside from a new record for a Chu Teh-chun calligraphy, Sotheby’s set a new artist record, selling Les eléments confédérés, Chu’s only pentaptych, for HK$114 million (US$14.7 million). This was followed shortly after by a fierce ten-minute, four-way bidding that shot Sanyu’s Quatre Nus to HK$258 million (US$33.3 million) before the gavel came down. Meanwhile, Christie’s Hong Kong set a new auction record for a still life by Sanyu with White Chrysanthemum in a Blue and White Jardiniere which appeared at auction for the first time in 15 years and sold for HK$191,620,000 (US$24,844,389) after a bidding war that lasted over 10 minutes. “In general, collectors are long-term focused, and will acquire top quality works through gyrations in the market,” Belin commented.

But fair warning to our auction specialists; collectors are not buying into the price inflation game. Crockett noted, “Collectors are looking for best quality works across the spectrum but one thing these sales prove is that the market is price sensitive. The market is more cautious now and overpriced works are struggling to sell.” Could that be why Zao Wou-Ki’s 21.10.63 which came with an estimate on request, was unsold after bidding stopped at HK$80 million?

 

Top lot at Sotheby’s Modern Art Evening Sale on 8 July 2020: Sanyu, Quatre Nus, circa 1950s, oil on masonite, 100 by 122 cm. Image courtesy of Sotheby’s.

 

The Building Blocks of Trust

One of the outcomes of the pandemic ravaging the art market has been the acceleration of online sales. According to the Hiscox Online Art Trade Report 2020 published earlier this month, globally speaking, Sotheby’s reported a 131% increase in the number of lots sold online this year as of May 2020, while between the three auction houses, online-only auction sales generated a staggering US$370 million just in the first half of 2020, five times higher than the same period in 2019.

Between galleries rising to the challenge of selling via online platforms to art fairs bringing us so-called online viewing rooms, and now the auction market proliferation of online sales, it would seem the digital transformation of the art world has finally arrived, like it or not. What is also becoming clear is that collectors are finding their stride and confidence is building in the transaction of art over the information superhighway of the Internet. While Phillips reported that the Day Sale this season saw more online bidders—400 eager mouse-clickers from 34 countries—than in any 20th Century & Contemporary Art sale across Phillips Asia, Christie’s noted a 47% increase in online registrants, while Sotheby’s reported 90% of lots last week were sold on the phone, or via online and absentee bidding, a clear sign of buyer trust in their auction house specialists.

 

Christie’s ONE Sale kicked off just after 9pm HKT on 10 July 2020. In a relay auction with auctioneers from Hong Kong, New York, Paris and London. [Top to bottom]: Elaine Kwok, Hong Kong; Adrien Meyer, New York; Cécile Verdier, Paris; [Right]: Jussi Pylkkänen, London. Images courtesy of Christie’s.

Goodbye Circadian Rhythm
 

The art world is by and large well accustomed to working across continents and time zones. From mega fair corporations to galleries and auction houses, staff are used to juggling calls with colleagues on the other side of the world. Now would also be the time to remember that online-only sales are not new. While Christie’s was the first to jump on the bandwagon in 2011, Sotheby’s introduced it in 2016 and Phillips followed closely behind in 2018. Online-only auctions have, for all these years, become part of the art market equation already. It’s just that most of us were still wrapped up in the high glamour of live auctions.

However, with the global auction calendar disrupted by the pandemic in an unprecedented way, auction houses had to scramble, not just to find viable business solutions (answer: more online auctions), but for the sake of growth as we enter a state of “new normal,” they also had to rival each other with new sale formats. This came in the form of hybrid auctions involving simultaneous live bidding and online bidding. Topping that cherry on the cake was the logistics of gathering auctioneers and specialists across continents to run phone bidding concurrently.

While all three houses ran their first hybrid auctions to test the waters—with varying levels of success—it was perhaps Christie’s “ONE: A Global Sale of the 20th Century” sale, bringing together auctioneers from Hong Kong, London, New York and Paris in a relay auction, that took the limelight.

Christie’s heavily marketed “ONE” sale began with some delay, just after 9pm Hong Kong time, with Elaine Kwok, Director, Chairman’s Office, Christies, leading the first 10 lots of the 79 lot sale (note that three works were withdrawn prior to the sale). Admittedly, I only survived sitting through three quarters of Christie’s marathon relay, falling asleep on my couch somewhere between New York and London (I’m definitely no night owl).

The most fascinating aspect was not so much the sales figures achieved, but in the logistical coordination of four auctioneers—each accustomed to taking charge with their own gavel—playing nice across the virtual space. It wasn’t without hiccups, and some rather funny moments, but most of this seemed to happen with auctioneers Cécile Verdier, President of Christie’s France, in Paris, and Jussi Pylkkänenthe, Global President of Christie’s, in London. By and large all the wrinkles ironed out fairly quickly and it was perhaps the most complex hybrid auction thus far. Christie’s reported some 80,000 people tuned in to watch the sale across a dazzling array of digital platforms. Buyers were, interestingly, fairly evenly broken down; APAC accounted for 26%; Americas 37%; and EMEA 38%. The combined total of the four-leg global sale rang in at HK$3.24 billion (US$421 million) with 94% of lots sold.

“Physical and digital coexistence is the new formula for the art market in this day and age. By combining our sales in London, New York and Paris and integrating a part of the Hong Kong sales into an international event, this concept had successfully engaged clients in four of the global art market hubs and our entire team,” said Belin. When asked if Christie’s may continue the new format, he noted, “The pioneering sales format of ONE was successful—Christie’s will ride on this successful formula to develop new and exciting auction formats in the future, so we may best serve our clients everywhere.”

So is cyberspace the future of the auction market? Toggling screens has become our new reality but does the need to make money through online sales outweigh the importance of circadian rhythms? Remembering that the art world was already functioning at a frenetic pace where jet lag was a constant thing pre-COVID-19, we would be wise to take caution on the viability of a digitally transformed art world.

*all lot prices are rounded up and include buyer’s premium unless otherwise stated

 

 

 
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