Millennials and digitalization present a Covid-19 lifeline to the Chinese art market

The Covid-19 pandemic didn’t just put the global economy to a skidding stop. With this year’s Art Basel Hong Kong canceled—along with the suspension of art fairs, exhibits, and events all over the world—the outbreak also put the Chinese art market’s future into uncertainty.

Despite its standing as the third biggest in the world, projections of the Chinese art market’s return to the glory days of 2011—when it overtook the United States with a US$5.1 billion turnover for fine art and antiques—remain slim. While the Asian giant accounted for 18% of the US$64.1 billion that was spent on art last year, according to the latest Art Basel and UBS Global Art Market Report, there were also decidedly fewer buyers and collectors making bids in Chinese auctions. Political and economic issues, such as the trade war with the US and the Hong Kong protests, have created what Art Economics founder Dr. Clare McAndrew described in the report as “a cautious climate for both buyers and sellers,” resulting in a 10% drop in sales in 2019—a loss for the second consecutive year. (Both the US and UK markets also experienced a decline last year.)

Yet appreciation for Chinese art—antiques in particular—continues to rise. The most expensive artwork ever sold by Christie’s in Asia is the 1,000-year-old rare ink painting “Wood and Rock” by Su Shi, which went for just under US$60 million in 2018. Sotheby’s Asia’s highest-value lot in 2019 was a 300-year-old pouch-shaped Beijing enameled glass, which sold in Hong Kong for US$26.4 million. A more recent piece, Chinese-French painter Zao Wou-Ki’s “Juin-Octobre 1985” (1985), sold for US$65.2 million at Sotheby’s in 2018, the most expensive work of art to go under the hammer in Hong Kong.

An heirloom Jian “Hare’s Fur” Bowl from the Song Dynasty atop a lacquer smith's low table, Urushi Goshi Joban, from Japan’s Showa Period. Image courtesy of Sotheby’s Asia.

According to Sotheby’s Asia chairman Nicolas Chow, who also serves as the auction house’s international head and chairman for Chinese Works of Art, Chinese art continues to be in high demand among collectors from China, the US, and Europe. He points to Sotheby’s HK$1.52 billion in aggregate sales for Chinese artworks in 2019 as proof. “Buyers are selective and discerning, but the appetite for top quality, rare, and fresh masterpieces continues to be there.”

A rising breed among these buyers is comprised of millennials. Says Chow, “Our latest Contemporary Art Hong Kong Online sale (held in the first half of April) achieved over HK$10 million, and almost 50% of the bidders were aged below 40.” Aside from being digital-savvy and quite accustomed to non-traditional bidding methods, these young buyers also “tend to be more eclectic and diverse, going beyond the status quo and supporting artists that align with their personal tastes and styles.” Both interested in art history and exposed to global contemporary art, they’re as likely to buy a Zhang Daqian as a Zao Wou-Ki.

And for some of them, they’re likely to become major players in the art industry as well.

Michael Xufu Huang, 26, is an example. In 2014, he co-founded M Woods, a non-profit private art museum in Beijing that is now an international art destination in China. He resigned from the museum five years later to partner with fellow University of Pennsylvania alum and millennial collector Theresa Tse in creating the X Museum, a new art space that houses 300 works and 10 galleries within a two-story renovated space spanning 26,000 sq. ft. Located in Beijing’s Chaoyang District, it was initially slated to open with a Triennial in March 2020. Though the event was delayed, the X Museum website and the X Virtual Museum were still launched to give viewers a digital peek into the Triennial.

A collector since he was 16, Huang’s collection includes paintings by Nicolas Party, Julie Curtiss, and Wang Xiaoqu, and sculptural/installation works by Jesse Darling, Max Hooper Schnedier, and Pamela Rosenkranz. He also joined the New York City-based New Museum’s board of trustees in 2016, becoming not just their youngest member but also their first Asian one.

A scene from the Media and Technology section of the X Museum Triennel. Image courtesy of X Museum.

The 2020 Art Market Report cites the biggest year-on-year growth rate (19%) among buyers who are below 40 years old, indicating the bigger role millennial collectors are playing in the scene—and a possible lifeline for an unstable art market. Says Huang, “Changes make opportunities. I think this is the time for millennials to demonstrate how we can use some new technologies and ideas to reform the art world.”

Going online has been an increasing concern for the global art market in the past couple of years, spurred by business and environmental sustainability issues. Institutions that had the prescience to build their digital component even before the pandemic hit discovered a wider reach, lower operating costs, and a more flexible business model in the digital realm, especially with younger buyers also online-savvy.

The Chinese art market has had a head start in this arena, with China as the most tech-adoptive country in the world, in Huang’s opinion. “According to data, we have more Chinese people visiting our virtual museum than the rest of the world combined.” Though he doesn’t work in the business side of the industry, he sees the internet’s importance in making art more accessible to people globally. He clarifies, however, that post-pandemic, X Museum’s digital platform will exist alongside their physical operations. “We are not shifting our focus [to only] online; X Virtual Museum is built as an extension to our physical space.”

It's a plan that brick-and-mortar institutions could do well to adopt, even after when pandemic-triggered restrictions get lifted.

According to the 2016 report from the China Association of Auctioneers, total online auction sales in China generated US$3.2 billion in 2014, a time when doing online art sales was still nascent. For a few years now, Chinese platforms such as Verisart, ePaiLive, and Hihey.com have been providing services to new buyers to make online purchases easier and safer. Truly embracing the younger market, WeChat even created the auction group ArtJeff Day and Evening Sale, where buyers can view and bid on contemporary works from Chinese, Japanese, and Western artists through the app; Cifnews reports that ArtJeff’s annual turnover as of 2015 was 10.45 million yuan.

A screenshot of Verisart’s landing page. Verisart is a platform for certifying and verifying artworks and collectibles using the bitcoin blockchain.

Regional giants Sotheby’s Asia and Christie’s Asia Pacific are also benefitting from the early leap they had made into the digitized art market. For the latter, in particular, the digital infrastructure they’ve developed in the past few years has enabled them to pivot quickly and roll out programs that made the transition from live to digital seamless. Aside from their 360° tours, online viewing rooms, and live chat functionalities with their client services team, Christie’s Asia Pacific president Francis Belin is proud of their multi-featured WeChat mini-program, describing it as “an important channel that both provides [real-time access to] information and education and drives new registration and buyers.” These digital innovations have helped raise the auction house’s online sales stats in April, a time when most other industries were beginning to feel the economic repercussions of global quarantine measures; their Contemporary Art Asia Online sale, for example, generated US$783,000, double the initial estimate.

Though sales figures for the online art trade are modest, they hold promise. With the physical restrictions set by the pandemic, the developing digital trade presents a way forward for Chinese galleries and artists to strengthen their presence among younger buyers and overcome the uncertainty posed by current physical restrictions. “Digitalization of the art market has been in the making for years. Collectors are ready for this type of engagement and transaction,” says Belin. “Online buyers are transacting at higher average lot values as they gain confidence with digital purchases.”

While the current perfect storm of circumstances has caused major upheavals, it also presents a prime opportunity for the market to be more dynamic. “The Covid-19 pandemic has certainly been challenging for many companies, but it [does not mean] a complete change of direction,” Chow opines. “This unprecedented period is crystallizing pre-existing trends and accelerating innovations.” Business may not be usual for quite a while, but that doesn’t mean everything has to be on ice.

A version of this story was published in September 2020 on the South China Morning Post. Lead image of a root wood sculpture from the Qing Dynasty (18th century) in front of a folding screen featuring a Sofu Teshigahara Dragon is courtesy of Sotheby’s Asia.