Unpacking the online art economy
In 2020 the Covid-19 pandemic forced the international art market online. Will it stay that way?
When the international art fair Art Basel Hong Kong cancelled its physical edition and went online in March this year, due to the Covid-19 pandemic, the art world was sceptical about the levels of success it could expect. Would collectors really be willing to part with millions of dollars for works they were only able to see on the screen of their computer or mobile device? Would the levels of trust established by previous in-person contact between art dealers and collectors be robust enough to weather this storm?
The global art market has always relied heavily on in-person contact. In the last two decades, it has become customary for collectors and dealers to meet face to face at the world’s art fairs, doing deals and making sales in between cocktail parties and exclusive dinners. Covid-19 changed all that, perhaps for good. But how viable does the online art economy really look?
A new report by art insurance giant Hiscox and art market research firm ArtTactic shows that in 2019 the online art market grew 4% from $4.64 billion (R73 billion) to $4.82 billion (R79 billion). While the outlook for 2020 is, by necessity, slated to be better, Hiscox’s annual Online Art Trade Report for 2019 clocked a decline in growth from 2018, which saw an increase in online sales of 9,8%. For perspective, the general online retail market accounts for 16,7% of the total global retail market, the report said. By comparison, the online art market accounts for just over 7% of the total global art market (as at the end of 2019).
Time will tell how these figures will have changed in 2020, but the performance of fine art auction houses is always a good ongoing barometer for the performance of the art market in general.
This year, auction houses the world over have reported great successes with online sales, even though the overall art economy had, in 2019, contracted by 5%, according to a report by Clare McAndrew titled “The Art Market 2020”. Both Sotheby’s and Christies reported record online auction sales in the contemporary and modern categories during lockdown, and Sotheby’s even curated a sale that responded specifically to global lockdown conditions. Titled 'I have to stay at home' and conducted entirely online, the sale featured works by American contemporary and modern doyens including Jeff Koons, George Condo, Clyfford Still and Roy Lichtenstein and grossed $383 million (R6.2 billion).
In South Africa, the largest auction house, Strauss & Co, has reported robust sales, suggesting that geographic constraints are not a serious factor in determining the success of sales, and that buyers are perfectly comfortable with parting with large sums of money online. Strauss & Co’s chairperson Frank Kilbourn, said the following in a recent email address to stakeholders: 'One of the big lessons of 2020 for us is that the geographical location of an auction is no longer relevant, and is indeed quite limiting.'
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