Art Market 2017
New art market data has recently been published by leading art market analysts. 2016 was an exciting year, with many changes for the traditional art commerce models, merger and acquisition activity between the stakeholders, and an overall continued decrease in global art sales in value and volume. Generally, the commercial online art market includes different players: there are auction houses, online platforms and gallery or auction consolidators, also known as 3rd party platforms, and online marketplaces and dealers, either exclusively online, or offline channels with their own online access. However, it can get confusing, as there is different data out there, let’s have a look:
Firstly, although there is no official data for 2016 yet, the Hiscox Online Art Market Report stated that the online art market reached $3.27bn (+24%) in revenues, a number that does not include the Chinese online market, which in 2014 reportedly generated an additional $3.2bn in total auction sales. However, this number does include 3rd party dealers and platforms. We are looking forward to sharing the new report with you, which annually releases around April – stay tuned.
Secondly, this year the “Global Art Market Report” by TEFAF used a different methodology of industry estimates for their annual analysis, launched in March. The researchers corrected their previous statement, and reduced almost one third of their prior estimations of the art market. TEFAF now states that the global art market’s value is only $45bn and grew slightly with a +1.7% increase over 2015, with sales moving away from auction sales to private dealers. According to the report, collectors are drawn to dealers, who now account for 62.5% of global art sales, for support, transparency and discretion. Buyers are embracing the support, transparency and discretion that dealers and galleries provide. However interesting this report is, there was not published any quantifiable online market data, which is why we are referring to the next report for this article.
Finally, according to “The Art Market 2017”, a report by Art Basel & UBS launched in March 2017, the sales of global art and antiques achieved $56.6bn, down -11% vs. 2015, with the markets in the US, UK and China making 81% of total sales. As the year before, in this overall slowdown, online art sales are growing. Online sales of art and antiques have shown a +4% increase, a relatively solid evolution in this context, reaching $4.9bn and gaining importance: they are now almost 9% of overall sales, in certain countries, like Germany, they are already and estimated 12,7% (source: Statistisches Bundesamt), which is a country of a generally high acceptance of online purchases in many industries. What is interesting is, that this is a very conservative estimation, as they only include revenue generated by online auction houses, offline galleries that sell online and online only companies. They do not, however, include revenues or commissions from 3rd party platforms, like for example Invaluable or Catawiki.
In terms of money spent by collectors, in 2015 fine art was mostly sold online in the lower price segments, with 61% of sales being under $5,000. In 2016 however, much more expensive pieces have been sold through the internet, with surveyed market players revealing that 75% of their sales were now below $50,000 and an increasing percentage of works sold over $250,000.
As a conclusion, online sales platforms were able to gain the trust of their collectors, and after a period of buying works online in the lower price ranges, they are now getting more comfortable and spending higher sums on art online.
Volume of Sales of Online Companies by Price Level:
Especially art dealers appreciate the online channel as the most important tool to acquire new collectors. Last year, over half (56%) of their sales were made to new clients which they have never personally met. The most common problems for online art dealers are the access to supply of good pieces, art market regulations, logistics and art transport. Also, conversion of traffic to buying artworks remains a main challenge and creating engagement with the visitors is, as in other online businesses, a major factor of success.
In terms of brand awareness, social media channels, especially Instagram, followed by Facebook and Twitter, are important for art related companies and serve many collectors to discover and share art.
E-commerce continues to grow of importance for the art market, due to its convenience, efficiency, accessibility, the speed of transactions, which is important in an emotions-driven market, and because it connects international works with global collectors.
The future of the global art will be influenced by the political uncertainty of many important countries. 50% of art dealers believe that the UK leaving the EU will have a negative effect on their sales, as the UK alone accounts for 24% of all art sales. 55% of art dealers worldwide also see the new presidency in the USA pessimistically in terms of art sales evolution. On an optimistic note, art dealers believe that globalization generally is contributing positively to the art market development.
Sources: Tefaf Art Market Report 2017, Hiscox Online Art Trade Report 2016, Art Basel & UBS The Art Market 2017.