The 2014 TEFAF Art Market Report, compiled by Dr Clare McAndrew and published this week by the European Fine Art Foundation to coincide with TEFAF Maastricht contains some eye-catching statistics and projections.
Section 2.4 (p27-28) of the report covers online sales, noting the impact the web has had on art sales in 2013:
Previous studies conducted by Arts Economics for TEFAF have observed that the art market was relatively slow in recognizing the potential of the internet as a means both of selling and of enlarging its client base. This is now beginning to change rapidly, both for the auction sector and for dealers.
Key findings from the report include:
- Online sales accounted for an average of only 1% in the top-tier houses, but 6% in second-tier auction houses
- In the US market, online sales account for 11% of auction house sales
- 60% of auction businesses responding to the report survey did not do any online sales
McAndrew outlines the two main strategies which auction houses are following for digitizing their businesses – internal sales platform development (favoured by top-tier auction houses) versus the use of third party online platforms. McAndrew concludes that “the top end of the market is generally less suited to online sales” and that the main focus of online companies – and the main digital opportunity – is currently in the middle market. However, she notes that as new generations get accustomed to online transactions, “this [price] ceiling is gradually shifting upwards”.
Dealers and galleries
McAndrew also sets out the online sales impact for dealers and galleries. Overall online sales account for 5% of sales across all dealers surveyed (7% in the US). However, excluding dealers who did not carry out any online sales, the remaining dealers report the following (equivalent statistics for the US market – a special report section this year – are in parentheses):
- 14% of total sales by value were online (also 14% in the US)
- 62% of online sales by value were to new buyers (58% in the US)
- 10% were to repeat online buyers (9% in the US)
- 28% were to repeat in-person buyers (33% in the US)
- 67% of dealers expect online sales to increase over the next five years (55% in the US)
- 66% of dealers felt that the internet and online sales were having a positive influence on the art market (50% in the US)
McAndrew reports that in China, e-commerce in the online art market has doubled from an estimated €100 million in 2010 to in excess of €200 million in 2013 (p.123). The online art market in China is, if anything, more competitive than the western market with many large, established e-commerce platforms now offering fine art sales including Alibaba (bigger than eBay and Amazon combined.)
Weighing in at 159 pages packed with statistics, McAndrew’s report – as usual – is an impressive piece of work that merits careful reading. In terms of the impact and promise of online sales in the art market, McAndrew concludes:
Online sales in 2013 were estimated to have been in excess of €2.5 billion, or around 5% of global art and antique sales. It is estimated that the online art market, including online sales by auction houses, dealers and online-only companies, could grow at a rate of at least 25% per annum, meaning that they could exceed €10 billion by 2020.
To quote Artnet’s summary of the report’s 10 key conclusions: “There’s a reason for all those online art sales start-ups.”