China's auction market going digital

The global auction industry has been in a downturn for the past six years. But participants in the fourth Chinese Antiques and Artwork Auction International Forum in Shanghai over the weekend said China was a bright spot last year.

In the first seven months, the art auction volume in the country reached 28.7 billion yuan, up more than 10 percent year on year. Auctioneer China Guardian ranked first in terms of volume in 2017's spring season.

"We have just wrapped up our spring auction and the results exceeded our expectations. We believe a rebound in the auction market in China is coming,” said Hu Yanyan, president of China Guardian.

The growing interest and purchasing power of Chinese art buyers have attracted international auction powerhouses like Christie's. However, foreign firms are still restricted from selling artworks produced prior to 1949.

Experts say experience-centric higher end auction is not giving in to digital disruption.

"Now, globally for Christie's, Asian and Chinese buyers accounted for 35 percent of the total auction value, which is really tremendous. A few years ago, you couldn't even imagine that over a third of our total global auction value would actually be from this part of the world,” said Charlotte Liu, China managing director at Christie’s.

As with many sectors, businesses in the auction industry are going digital. Online auctions now account for 8.4 percent of total art auctions globally. Christie's leads the way in digital sales. Its global online auction platform grew by 109 percent in 2016.

"Younger buyers are certainly fueling the growth. The data that we have says buyers from the ages of 20 to 35 are really fueling online trends,” said John Caruso, head of digital experience at Christie’s.

But are customers enthusiastic about going online? Data suggests that customers for higher-end art pieces still prefer to be in the showroom when making an appraisal. Many companies are developing online channels for lower-end, and standardized, auction items.

"One of the hottest items on our online platform has been luxury red wine. For wine, if you know the brand and year, you pretty much have an idea of what you're getting. Many of our younger clients bid for wines through this channel,” said Hu Yuanyuan.

The digital trend is creating a new competitive landscape at the lower end of the industry. Over 2,000 online auction platforms have emerged.

They require lower deposits for bidders, which carries its own attractions and risks.

Major e-commerce firms such as Alibaba and JD.com have also created their own auction segments. The auction industry in China could be facing further segmentation in the future.

(CGTN)