The Digital Transformation of Auction Houses

Ian Tee

If necessity is the mother of invention, then the COVID-19 pandemic has forced many aspects of the art industry to adapt to rising tides or risk going under. For auction houses, this disruption is especially hard as they traditionally organise their sale seasons around key events in the art calendar. I speak to representatives from various Southeast Asian and international auction houses, who shared their observations on the pulse of the secondary market as well as the challenges they see in the near future.

Digital acceleration at different capacities

Even though the business was already making efforts to build its online capabilities, the pandemic has sped up digital acceleration across the board. Digital initiatives range from more modest upgrades of existing websites to the development of mobile apps catered to specific markets. David Fu, Director of Singapore-based 33 Auction, comments that the transition process was smooth for them because their revamped mobile interface went live prior to the start of the pandemic. “We saw encouraging results from online-direct sales, from both privately and through online exhibitions,” Fu adds.

Similarly, Larasati started their first online-only auction in December 2014 and has been working with the third-party platform Invaluable since 2016. “The challenge was to convince clients that what they see online are accurate representations of the artworks,” says Chief Executive Officer Daniel Komala. As clients gain trust and familiarity with the online platform, he expects that digital marketing will take over physical presentations, especially for artworks at the lower end of the market. New digital features are also rolled out to enhance user’s online experience.

Augmented Reality (AR) is adopted by the international auction houses as an alternative to in-person viewing. Accessible through their websites and mobile apps, the technology allows clients to examine details of selected lots and visualise how an artwork might look in their space. For a more personalised experience, clients can also track, save and share their favourite lots on the Phillips and Christie’s apps.

New formats for online sales

With the shakeup, specialists see the online sale as an opportunity to experiment with new formats. Phillips introduced Gallery One, a “next-generation” auction experience where a fresh selection of artworks is available for bidding on their website and app on a weekly basis. “This new streamlined business model enables clients to buy and sell works beyond the constraints of the traditional auction calendar,” says Sandy Ma, International Specialist for 20th Century and Contemporary Art at Philips. She also notes positive results from their cross-category sales in Hong Kong, and in particular, an uptick in watch collectors buying art for the first time.

Another major innovation is the pivot from saleroom auctions to livestreamed and multi-city relay events. Happening both in person and online, the new hybrid format compresses the traditional auction season usually held across different cities into a marathon of successive sales. “It is an opportunity for us to unite our global specialist teams and curate a sale that offers global collectors the best pieces from around the world,” says Dexter How, Vice President and Senior Specialist of Southeast Asian Art at Christie’s Asia Pacific. While the hybrid format continues to evolve, he sees its potential to become the best platform to offer artworks.

Support of local collectors is vital for regional auction houses

For Southeast Asian auction houses, the support of local collectors is vital for regional artists. Even as art events are expected to return in the coming months, travel restrictions mean that regional collectors are likely to only engage with them online. “Our short-term interest is in expanding the Singapore art category and working more closely with local collectors,” comments Fu. In Malaysia, Henry Butcher Art Auctioneers (HBAA) brought in a total of RM8 million from three auction sales in 2020,

Liu Kang, ‘Street Scene (Cheng Hoon Teng Temple, Malacca)’, 1954, oil on canvas, 120 x 70cm. Image courtesy of Phillips.

INTERSECT cross-category online auction by Phillips, March 2021. Image courtesy of Phillips.

achieved through a core group of local clients. “This would not have been possible without our loyal supporters,” says Director Poleen Sim. However, he also shared that private sales at HBAA have dropped drastically, with tougher buyer negotiations resulting in a low number of transactions.

As the Southeast Asian market matures, clients are becoming more discerning with their acquisitions. “We have become more selective in bringing Southeast Asian works to market and this is reflected in higher sell-through rate in recent years,” comments How. He cites Christie’s Spring 2020 Sale in Hong Kong, where the Southeast Asian group brought in more than HKD42 million, exceeding its pre-sale high estimate.

Additionally, Ma observes that collectors from the region are looking to develop their collections in a two-pronged approach. “They are strengthening their Southeast Asian collection, whilst concurrently developing their international contemporary art collection,” she elaborates. “This trend coincides with a growing number of private museums in the region.” Indeed, the private collections such as MAIIAM in Chiang Mai and Museum MACAN in Jakarta showcase pieces by Southeast Asian artists, alongside their contemporaries from around the world.

Exceptional works continue to sell at strong prices

Despite the challenging climate, Southeast Asian artworks of exceptional quality and provenance continue to sell at strong prices. At HBAA’s Malaysian and Southeast Asian Art sale in August 2020, Ibrahim Hussein’s acrylic on canvas painting ‘Calama Desert’ (1991) sold for the artist’s second highest auction price, at RM820,000. Srihadi Soedarsono’s ‘Dalam Meditasi Bedhoyo Ketawang’ (1998) hammered at HKD3.5 million at Sotheby’s Hong Kong Modern and Contemporary Southeast Asian Art Evening Sale in July 2020, a new record for a figurative work by the Indonesian modern master. In Sotheby’s Paris, Le Pho’s ‘Autoportrait dans la forêt (A Self-Portrait in the Forest)’ (1929) achieved €720,000, more than three times its high estimate. The self-portrait is a rare early work made during the artist’s time in the Hanoi School of Fine Art, before he earned a scholarship to study at the École des Beaux-Arts in Paris in 1932.

Srihadi Sudarsono, ‘Dalam Meditasi Bedhoyo Ketawang (State of Meditation – Bedhoyo Ketawang)’, 1998, oil on canvas, 140 x 300cm. Image courtesy of Sotheby’s Hong Kong.

Ibrahim Hussein, ‘Calama Desert’, 1991, acrylic on canvas, 182 x 180cm (diptych). Image courtesy of Henry Butcher Art Auctioneers.

Another coveted early oil painting is Mai Trung Thu’s ‘Portrait of Mademoiselle Phong’ (1930) which hammered at HKD20 million at Sotheby’s Hong Kong ‘Beyond Legends’ Modern Art Evening Sale in April 2021. I had earlier written about Mai Thu’s work and the growing market for modern Vietnamese painting in the previous essay ‘Modern Southeast Asian Artists of Note’.

Vincente Silva Manansala, ‘Tiangge (Market Scene)’, 1980, oil on canvas, 124 x 195cm. Image courtesy of Christie’s Images Ltd.

Vu Cao Dam, ‘Femmes au bain (Women Bathing)’, 1944, ink and gouache on silk, 50 x 60.3cm. Image courtesy of Christie’s Images Ltd.

Christine Ay Tjoe, ‘Layer as a Hiding Place’, 2013, oil on canvas, 180 x 200cm. Image courtesy of Phillips.

Christie’s achieved a string of new world records, establishing itself as a market leader for modern Southeast Asian works. A highlight was the Jean-Marc Lefèvre Collection of Vietnamese art offered at their Hong Kong Modern and Contemporary Art Morning Session in December 2020. In the group of 15 paintings, two records were achieved for Vu Cao Dam’s ‘Femmes au bain (Women Bathing)’ (1944) at HKD6.5 million, and Nguyen Phan Chanh’s ‘Les couturières (Seamstresses)’ (1930) at HKD8.9 million. In their July 2020 Modern and Contemporary Art Evening Sale, Luong Xuan Nhi ‘Le repos (Resting)’ (1936) hammered at HKD4.2 million, five times its high estimate. In their December 2020 Modern and Contemporary Art Evening Sale, ‘Tiangge (Market Scene)’ (1980), a late work by Philippines National Artist Vincente Silva Manansala, resurfaced in the market and sold for HKD6 million. This is an increase of more than 600% from its previous hammer price of HKD850,000 in November 2005.

In the contemporary category, Christine Ay Tjoe’s works remain in great demand. On 8 July 2020, Philips hammered ‘Layer as a Hiding Place’ (2013) for HKD5.5 million, while ‘The Flying Balloon’ (2013) closed at HKD4.8 million at Sotheby’s, establishing the artist’s second and fifth highest prices respectively. Notably, ‘Layer as a Hiding Place’ sold through an online-only sale, at a price nearly 50% higher than the one it had achieved in April 2014.

Looking ahead, the cultivation of new audiences is paramount for the sector. “The challenge is to stay relevant and build a generational collector base,” says Michelle Yaw, Specialist in Southeast Asian Art at Sotheby’s. To do so, they are maximising their online sale platforms and social media appeal as a means of reaching millennials who are accustomed to learning about and acquiring art in the digital sphere. Even though art is always best viewed in person, the future auction house is one where the physical saleroom merges seamlessly with online experience. In the meantime, the business is poised to continue innovating on the technological front.