This research report on the art auction market covers market sizing and forecast, market share, industry trends, growth drivers, and vendor analysis. The market study includes insights on segmentation by channel(offline and online), price (top end, medium-range, low end), product (fine art, decorative art, and antiques), and geography (APAC, Europe, Latin America, MEA, and North America).
The entry of blockchain in the art auction industry market is expected to improve trust and transparency
The use of Artificial Intelligence technology in the art auction market is expected to increase revenue streams, help make decisions, and enhance user experience. Since the art market is unpredictable, highly volatile, dependent on research and knowledge, and held by the reins of taste, emotions, and human subjectivity, it makes for predictive AI technology a compelling reason to harness the potential of big data. While it is not entirely replacing the human element, the technology is increasingly making the market efficient and helping to navigate the complicated terrain of information.
Several art auction online marketplaces and art auction houses are using AI and machine learning technology to support artists in selling their work and assisting collectors with finding pieces they would like for purchase. ArtRank is synonymous to an art-market analyst helping institutions and collectors make informed collecting decisions through its machine learning algorithms by aiding in determining the future value of works by budding artists. The technology, though rudimentary, has demonstrated some potential with regards to offering sophisticated ways for measuring the value of the art, reducing the grey area, and stimulating purchases.
The entry of blockchain is expected to improve trust and transparency in the global art auction market by offering new owners a trusted place to carry out due diligence, explore provenance, thereby reducing transaction costs by eliminating intermediaries and making more informed purchasing decisions. The global art auction market is expected to reach over $38 billion by 2024.
This research report includes detailed market segmentation by channels, price, product, and geography.
Art Auction Market: Channels
The offline art auction market is expected to witness an incremental growth of $7 billion by 2024.
Offline auctions have become more diverse in terms of lots. The offline segment is likely to retain its dominance in the art auction market as it is one of the few cultural-led businesses that has not been affected by the digital revolution. Several vendors are offering incentives to get edgy buyers and sellers to participate in auctions. Hong Kong, Japan, and South Korea have recorded massive growth. However, Europe, where most large auction houses were born, remains a broad zone of supply and export.
Since the online market has tons of potential for those with a penchant for art regardless of their budget, the segment is expected to grow. Online auctions are expected to overcome several challenges arising from the broadening market - auction rooms are a little small to be able to cater to an expanded audience, exacerbated by the lack the logistics and the funds to cover the expensive catalogs. Vendors depend on mobile applications that enable real-time bidding and live streaming of auctions. Hence, technology is thereby playing more of a complementary role than a supplementary role.
Art Auction Market: Price
The top-end art auction segment is highly dependent on brand value and popularity
The top-end art auction market is highly concentrated due to low-profit margins with high risks. The segment is highly dependent on brand value and popularity. As the competition in the top-end segment is intense, players often undercut each other and are ready to decrease their commissions for the sake of staying competitive. Millennials are expected to drive the demand for high-end decorative art pieces, which is likely to drive several auction houses to expand their decorative art lots.
The mid-range art auction market is in the right place. The quality and the sheer scale of the market are beginning to increase the appeal for sellers. The US, China, and the UK account for more than 75% of the mid-range art auction market with China taking the lead in terms of value. Several leading players that typically offer high-end pieces are increasingly focusing on the mid-range artifacts as they usually earn commissions. Another driving factor that illustrates that art collecting is entering the mainstream, thereby likely to benefit the mid-range market, is the popularity of prints. Print collectors are expected to level up their collections and begin investing in more expensive arts.
Owing to the advent of the digital revolution, an inclusive scenario has evolved for those interested in low-end arts. With the emergence of players such as Artsy and Invaluable, there has been an explosion of sales in low-end art categories. Neoliberal economies are driving the art market at this end. The UK, the US, and China account for more than 2/3rd of the revenue in this market with China taking the lead.
Art Auction Market: Product
The decorative art market is growing at a stable rate as it is not necessarily subject to speculative collecting
The scope of fine art and decorative art segments has witnessed expansion and shrinkage with the change in definition and value. The demand is coming mostly from high-quality fine art. The mid-range segment is likely to witness success. Also, portraits of figures of historical importance such as monarchs, kings, queens, and poets are expected to grow as collectors increasingly look at the application of the fine art. The collectors in Western and Eastern Asia and the Middle East are bolstering the market among global collectors. The collection of art is moving toward conscious consumption. As the art market is globalizing, new strategies have come forth to auction off noteworthy fine artworks outside of major art capitals.
The decorative art market is growing at a stable rate as it is not necessarily subject to speculative collecting. Cyclicality and supply and demand dynamics are the major underlying factors driving the decorative art market. However, this market is a lot more dependent on provenance, scarcity, and condition of the art. Millennials are active in buying decorative art from players in the overall art market. In terms of geography, the UK and Germany account for a high number of collectibles in the segment. China is an important market for decorative art as several leading tier auction houses sell a major chunk of decorative art.
The traditional antique market is comparatively more passive than categories such as Latin American silver and Italian Art made of semi-precious stones, which are displaying resilience. The lower price of antique objects is stimulating their demand, particularly contemporary antique. Hence, players, which focus on curating well-designed relevant pieces, are expected to find more success in the art auction market.
Art Auction Market: Geography
The US has a stronghold in the art auction market with New York dubbed as the international capital of the art market
North America witnessed solid growth in 2018, with the US holding a strong position in the market. The region accounts for more than 50% of the high-end collector base, a position it has held for over two decades in the face of intense globalization and shifting infrastructures of wealth. This has driven the sale of art and antiques in the US via national and global buyers. There is an increased demand for Chinese art as Western collectors begin looking outside of the regular pieces to enhance the versatility of their collections. The US has a stronghold in the art auction market with New York dubbed as the international capital of the art market and its position reinforced with its wide internal art network. The market in the US is highly intelligent and seeks high-quality art.
As the APAC market is at the center of capital flows across the globe, the region is benefitting from structural changes, which are demonstrating the highest potential for the art auction market. Collectors in the region prefer buying art at auctions over art fairs. A stable eco-political climate and the increased confidence in spending have resulted in the thriving auction market. Vendors can substitute loss in Europe through growth in Asia. India is another important market in the region, which is highly dynamic due to well-performing economy, organized transactions, and higher transparency. The market is diversifying, and the demand is spread across several art formats.
Barring the UK, the EU share declined by 8% in 2018, owing to prolonged market stagnation. This is mainly because of its regulatory structure, which makes it extremely expensive and complicated to carry out art transactions. The antique business slowed dramatically due to the predisposition that the market did not have enough young collectors and those that were participating in the market were uninformed and unrefined. Nevertheless, European auction houses have been swimming in uncertainty due to the increased uncertainty over the Brexit and high restrictions for sales to the UK because of the lower limit for exporting licenses and bureaucratic complications. There is an intense technological disruption being carried out among players in the market on a day-to-day basis, which is driving sales across borders. Live bidding and online sales are used to expand the customer base.
South Africa is likely to act as a springboard for the art market of other African nations as works from contemporary artists from Ghana, Nigeria, and Cote D’Ivoire are being displayed in Johannesburg and Cape Town. South Africa and East Africa are taking the lead in the development of world-recognized art. However, Nigerians are among the largest buyers at auction houses. In Latin America, there is expected to be renewed interest in the art scene in the region as higher visibility will likely increase dialogue between global art collectors and local auction houses.
Although the Middle Eastern economy is under stress, art has been viewed as a means of expression, driving the organic growth of the market, marked by the rapid growth of new museums, increase in art production, and growth of art institutions. Beirut, Egypt, and the UAE are well-performing hotbeds for innovations and new concepts in the art world, thereby demonstrating significant opportunities in the art auction market. There is an active demand for art pieces that belong to Middle Eastern Modernism and paintings based on war and political unrest.
Key Vendor Analysis
The art auction market is a duopoly - Sotheby’s and Christie’s. This is mainly because of the growing number of wealthy buyers that are contesting for a dwindling supply of the most famous artists. Both the firms have combined sales of more than 80% of works going for more than $1 million, and the competition between them is active. As Sotheby’s goes private, it is expected to intensify as the company regains its ability to compete more successfully with Christie’s without having to cut back on its negotiation for guarantees, specifically in high-value assignments. Phillips, however, while still far behind in terms of revenues, is showing quite some potential in catching up.
The market is not plagued by artificial scarcity. Most houses put on sale anything with very few exceptions. They mostly do not have deadweight loss excluding for a little more than a quarter of lots that do not do well at auctions and then sit in storage rooms. Vendors nevertheless face the challenge of sourcing of valuable, quality property to sell. Seeing as competition also comes from art dealers across all collecting categories, it is essential that vendors create meaningful, personal, and institutional relationships by providing clients with guidance on identity, collection, acquisition, and development. Auction houses must further aid with services that fall under finances, personal considerations, and logistics when it comes to helping clients sell their artwork.
Other Prominent Vendors – Artcurial, Artsy, Beijing Council International Auction Company, Bonhams, Bruun Rasmussen, DESA Unicum, Dorotheum, Doyle, Grisebach, Heritage Auctions, Invaluable, Koller Auctions, K Auction, KettererKunst, Lempertz, Mainichi Auction, Paddle8, SBI Art Auction, Seoul Auction, and Zhong Cheng Auction
Key Market Insights
The analysis of the art auction market provides market sizing and growth opportunities for the forecast period 2019–2024.
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