The Art Newspaper features Équité CEO Daniel Langer on NFTs and the growing art market in Asia
While Beijing cracks down on freedom of speech in Hong Kong, the art market is booming. Image © Carl Nenzen Loven
This article is published in The Art Newspaper, by Scott Rayburn
So it’s official: buyers in Asia are the biggest spenders at auction, according to Christie’s, which is relocating its Hong Kong headquarters to a Zaha Hadid Architects-designed tower due to open in 2024.
Christie’s says Asian clients have spent more than $1bn in the first half of 2021, a record 39% of its first-half turnover. In recent years Christie’s says that US, European and Asian buyers each generated about a third of its sales.
Phillips has also responded to booming demand from Asia, partnering with Poly Auction, China’s state-owned auction house, to hold sales in Hong Kong. Sotheby’s has transferred Alex Branczik, its London-based head of contemporary art, and Max Moore, a New York-based specialist with expertise in NFTs, to Hong Kong to grow sales.
Meanwhile, the economist Clare McAndrew’s just-released Art Basel and UBS report Resilience in the Dealer Sector found that Asian art dealers had the biggest improvement in sales in the first half of this year, with an average increase of 18% over 12 months, including a rise of 6% for businesses in Greater China. Compare that to European dealers who reported a 7% decline on average. McAndrew also found that collectors in Hong Kong tended to have the highest proportion of living artists in their collection (57%), and that 54% of them preferred buying online through a gallery website or OVR rather than in person.
Pandemic-related travel restrictions have reduced the number of Asian collectors expected at Art Basel this year (up to three weeks of quarantine is required upon returning to mainland China or Hong Kong). However, an Art Basel spokesperson says, “we have had confirmation of several major collectors from across Asia who are in many cases planning extended stays in Europe”, adding that uptake on the digital VIP offering by Asian collectors has been “enthusiastic”.
“China has superseded Japan as the world’s second-biggest economy. When will it supersede America?”, asks the London gallerist Ben Brown, who opened a branch in Hong Kong in 2009.
In March there were 626 billionaires in mainland China, a 62% increase from 2020, according to Forbes’s Billionaires 2021 report. There were a further 71 in Hong Kong, bringing the total number of billionaires in greater China to just 26 fewer than in the US. And then, of course, there is South Korea (43), Taiwan (47), Singapore (27) and Japan (49). The World Bank estimates the GDP of China will grow by 8.5% in 2021.
So if there is a tectonic shift in the art market from West to East as fundamental as the shift across the Atlantic in the early 20th century, what will be different this time round? For a start, when America’s “robber barons” bought art 100 years ago, they spent most of it on old paintings. Status insecurity made the nouveau mega-riche pay huge sums for 18th-century English portraits of aristocrats, long fallen out of collecting fashion. The £9.3m recently paid by London’s National Gallery for Thomas Lawrence’s 1825 portrait The Red Boy feels like a nostalgic nod to the exorbitant prices the legendary dealer Joseph Duveen hustled out of American collectors such as Henry Huntington, the railroad magnate. Huntington bought Gainsborough’s Blue Boy in 1921 for the then astounding price of $620,000 (around $8.9m in today’s money).
Though the auction houses are keen to flag up Asian collectors’ purchases of historic Western art, they tend to be more interested in international contemporary art, particularly works by rising stars. Auction prices such as the $1.1m for a 2018 portrait by Ghana’s Amoako Boafo proved the point in Hong Kong this year.
Why are Asian bidders paying more than ten times the gallery price for such works? “There is a desire to buy into the Western lifestyle. There are a lot of people who want it, and want it now. If they’re rich enough, why should they go onto Western galleries’ waiting lists?” Brown says, adding that these prices reflect a high-rolling edge to Hong Kong auctions. “There’s more of a speculative gambling culture in Asia... they want to make money out of art.” These Asian collectors also tend to be younger than their Western counterparts. “They’re in their 30s and 40s, sometimes even their 20s,” says Yuki Terase, Sotheby’s former head of contemporary art in Asia. For Terase, this new wave of Asian collectors falls into two main categories: “One is self-made and entrepreneurial, like IT billionaires, the other is second or third generation wealth. Art is a trophy they share on their social media platforms. They’re looking for newer names. They want to position themselves as someone who discovers young talent.”
Crucially, these trophies are discovered, bought and shared by Asian collectors on their phones. High-value works of art are routinely bought from live-streamed and online-only auctions, as well as from dealer shows and Instagram. Terase says that, “what has happened during Covid has really matched what Asian clients were already doing.”
Digitally-minded collectors’ seemingly diminishing need to physically engage with art could have a profound effect on this most traditional of businesses and, ultimately, art itself. If art is just a jpeg to show off on a phone, then what is the point of the expensive bricks-and-mortar galleries and auction houses? NFTs, for example, are perfectly suited to a collecting culture in which the physical existence of a collectible is viewed as an inconvenience.
The popularity of immersive digital “experiences” such as Van Gogh Alive, which has been drawing visitors to a marquee in London’s Kensington Gardens, and has attracted eight million visitors across the world, points to a cultural shift. Why bother to look at a real Van Gogh when you can be snapped sitting in Van Gogh’s Bedroom and then wow Instagram with that image on your phone?
Dawn of digital cultural consumers
“Asian collectors embrace crypto strongly, hence their affinity with digital art and NFTs,” says Daniel Langer, the professor of luxury strategy at the Pepperdine University in Malibu, California. “This fits with a broader, Gen Z luxury trend towards collections and investment. Digital art is easy to store and trade.”
For auction houses and galleries, there is little not to like about the huge market that is Asia, particularly China—as long as they think about increased revenues rather than democracy, human rights and China’s use of “distractive” capitalism.
“China, or Asia in general, has a much longer tradition of art collection than the West. Art collecting has been and is a way to show off wealth and accumulate wealth… which the new middle class in China urgently needs,” says the artist Ai Weiwei, a fearless critic of China’s authoritarian regime. “China, as an irreplaceable and unstoppable force, has penetrated all aspects in the West nowadays, including politics, economics, culture, scientific research and the art market,” he says. “Aesthetics cannot be dissociated from ethics and philosophy, and ethics and philosophy in the West will go downhill and eventually down into the dark abyss.”
Until then, cheer yourself with a thought for Henry Huntington. As SN Behrman recounts in his biography of Duveen, Huntington made the decision to buy Gainsborough’s Blue Boy during a phone call from Paris. Duveen, who was in London, charged him $20,000 for the call and added it to the $600,000 bill.
If only he could have closed the deal on WeChat.