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The sales performance of major international auction houses has always been regarded as a "barometer" of the global art market. In particular, the popularity and transaction status of the spring and autumn auctions of the top auction houses each year are considered by industry insiders to be a harbinger of the direction of the current art market.

After two consecutive years of growth in 2021 and 2022, the global art public auction market "cooled down" in 2023. Although the private sales of auction houses still maintained a certain growth, the total transaction volume of public auctions decreased significantly year-on-year, and the number of artworks priced above US$10 million decreased significantly, resulting in a sharp drop in the overall art market value. Looking at the auction season in the first half of 2024, the "chill" seems to continue.

Recently, Christie's and Phillips, two of the three largest international auction houses, have successively released their global performance reports for the first half of 2024. Affected by multiple factors such as weak global economic development expectations, geopolitical changes, insufficient market investment confidence, and fluctuations in the art market, the overall transaction volume of the top auction houses in the first half of this year showed a steady downward trend.

The picture shows a 6.21 carat fancy pink diamond ring, which was sold for more than 10.86 million Swiss francs. Photo courtesy of Phillips

Market ups and downs

In the context of slowing global economic growth and poor retail performance, Christie's global auction totals for the first half of 2024 were US$2.1 billion, down 22% from US$2.7 billion in the same period last year, not to mention that the global auction totals for the first half of 2022 were as high as US$3.5 billion. It is worth noting that in the performance report, Christie's did not provide private negotiation data for the first half of this year as in previous years, only stating that "private negotiations in all regions performed strongly and attracted new buyers to participate." Among the 10 artworks with the highest transaction prices in the world during the period, Christie's sold six and presented six important collections from prominent collectors, with an auction transaction rate of 87% (the same as last year). In the unstable environment, the provenance of the collection can be said to be a gold medal guarantee for buyer confidence. Among them, the Norman and Lill Collection, with a total transaction volume of US$60.2 million; the extraordinary jewelry designer Rosa de la Cruz Collection (100% sold in full), with a total transaction volume of US$34.4 million; the Sir Elton John Collection, with a total transaction volume of US$20.5 million; the artworks collected by Dolph Tapon Goldman, with a total transaction volume of US$19.1 million; the Barbier Mueller Collection from Paris, with a total transaction volume of €73 million, breaking the world auction record in the categories of African Art, Oceania Art and American Art; and the prominent collections including Dame Vivienne Westwood's personal clothing and the collection of watches of Formula One legendary racing driver Michael Schumacher all achieved remarkable results, contributing highlights to the overall mediocre data.

Christie's performance remained solid in other indicators such as the total hammer price to low estimate ratio, online bidding ratio and younger generation (millennial and Generation Z) customers. As Christie's CEO Stephen Schwartz pointed out: "Although Christie's total transaction volume declined slightly, the auction business remained stable in the first half of the year. In the face of a challenging macroeconomic environment, we maintained and improved the key indicators that measure performance."

Christie's has also focused on the outlook for the second half of this year. In September this year, Christie's will open a new Asia-Pacific headquarters at The Henderson in Hong Kong, China. In the future, it will be open all year round like its headquarters in New York and London, and will hold various art-related events outside of auction previews, and its auction schedule will also connect the world. In addition, Christie's will hold an innovative series of auctions in New York in September, presenting masterpieces from the collection of the late philanthropist and Microsoft co-founder Paul Allen. Plans for large-scale 20th and 21st century art auctions in Paris, London, New York and Hong Kong will also be announced later.

The picture shows the Philippe Dufour "Duality" platinum watch, which was sold for more than 2.05 million US dollars. Photo courtesy of Phillips

Jewelry is strong

Christie's is not the only auction house affected by a series of macro factors. According to Phillips Auction House, which also announced its half-year performance report recently, the first half of this year was also a "cold" half year for sales.

In the first half of 2024, Phillips' total global auction turnover was approximately US$373 million, down 8.8% from the US$409 million in the first half of 2023, and US$590 million in the first half of 2022. Phillips' average global auction turnover rate was 87%, a slight decline from the more than 90% global auction turnover rate in the same period last year. Similarly, there was no mention of specific figures related to private sales in Phillips' performance report.

In the first half of 2024, Phillips presented a number of important collections with distinguished origins across different categories, including: the old collection of Italian collector Francesco Pellizzi, the limited edition print collection of the well-known technology company Sherman, the watch collection of Italian scholar Guido Mondani, the collection of works by the late American fashion artist James Rosenquist, and the Polaroid works of the famous fashion photographer Stephen Klein, all of which achieved good sales.

The most eye-catching thing is the performance of jewelry auctions in Phillips' semi-annual report. Looking back at several recent global jewelry auctions, colored diamonds and colored gemstones have repeatedly achieved good results, showing that the current jewelry market continues to have strong demand for rare and high-quality colored gemstones and colored diamonds. Phillips has been committed to developing its jewelry business in the past two years. Last year, it added a jewelry auction in Geneva, a major auction center for high-end jewelry and watches in the world, which led to a significant increase in the transaction results of the jewelry department. The report shows that the total transaction volume of Phillips' global jewelry auctions in the first half of 2024 increased by 191% compared with the same period last year. Among them, the highest-priced item was a 6.21-carat vivid pink diamond ring, which was sold for more than 10.86 million Swiss francs (about 90.01 million yuan), ranking first in all categories of this year's Geneva spring auction.

In addition, Phillips also seems to be very good at watch auctions, and its watch department has continued to perform strongly in auctions in Hong Kong, New York and Geneva. In the first half of this year, a total of 11 watches were sold for more than one million US dollars. The total transaction volume of watch auctions held in Geneva and New York is ahead of other auction houses. The watch auction in New York has set a record of 100% full transaction of "white glove" for three and a half consecutive years.

On August 20 last year, Phillips officially launched its new e-commerce platform Dropshop. This platform is the first and only online platform in the global auction field that directly cooperates with living contemporary cultural artists, creators and brands. Through the "instant purchase and collection" e-commerce model, it provides artists with a platform to issue limited edition artworks, breaking the previous boundaries between the primary and secondary markets. In particular, when collectors resell the works of artists purchased in Dropshop through Phillips auctions or exhibitions in the future, the original authors will receive royalties and commissions from the transaction and share the success of their works in the secondary market. This original e-commerce model has been around for nearly a year and continues to bring new customers to Phillips. The report shows that in the first half of 2024, more than 50% of buyers on Dropshop are new customers attracted by the platform.

Looking ahead to the second half of the year, Phillips will hold a special auction of "TOKI" on November 22, themed on Japanese watch collections, while the Hong Kong Evening Sale of Modern and Contemporary Art on November 25 will also grandly present Sanyu's important masterpiece "Reclining Nude II".

Keep moving

As of press time, Sotheby's has not yet publicly released its global performance report for the first half of 2024. Looking at the results of the first round of Hong Kong spring auctions led by Sotheby's Hong Kong, Guardian Hong Kong, and Poly Hong Kong in April this year, the total transaction volume of the three auction houses in the first round of Hong Kong spring auctions this year has dropped to varying degrees compared with the spring auctions in 2023. Among them, excluding the transaction volume of luxury goods and online auctions, the total transaction rate of Sotheby's Hong Kong this season's spring auction was only 73.66%, with a total transaction volume of HK$1.972 billion, a decrease of nearly half compared with last year's spring auction of HK$3.783 billion.

It seems to be a general consensus that the sales slowdown in the art auction market in the first half of 2024 has become a general consensus. In the relatively tight environment of the art market, collectors who hold high-quality and high-priced items dare not sell, and collectors who are waiting for the market price adjustment dare not buy, which has reduced the transaction volume of high-end art. In this situation, how to find new growth points in the current weak market through strong collection capabilities, excellent auction items, and theme planning and pricing strategies that meet the market has become an important issue facing all auction houses. At present, many auction houses have chosen to adjust their countermeasures and focus on their own areas of expertise based on their own advantages. Some auction houses have brought collectors an upgraded exhibition and sales experience by renovating their headquarters. For example, Sotheby's flagship gallery, which officially opened in Hong Kong on July 27, has a museum-level exhibition space on the ground floor, which brings visitors an immersive viewing experience; on the first floor is Sotheby's Salon, which provides collectors with an ultimate retail experience covering nearly 20 categories, from dinosaur fossils to top handbags, African contemporary design furniture to Italian classical sketches, movie posters to contemporary jewelry. Christie's new Asia-Pacific headquarters will also open in Central, Hong Kong in September this year, and the total area of ​​art space will double. Bonhams Hong Kong will also move to a new office building covering 19,000 square feet in September. More auction houses continue to combine online and offline methods for previews and auctions, focusing on online platforms to attract new generation collectors. Some auction houses are also trying to hold innovative no-reserve specials and more mixed specials to attract more collectors to trade.

Although the global art auction market still has a "cold winter" to go through, we still believe that after every winter, there will be a spring when the ice and snow melt.