How Four Legacy Auction Houses are Bidding on the Future

It’s all change for the four legacy auction houses with headquarters in Hong Kong. Not only have they all re-located, but their business models have been transformed over the past decade. Prestige finds out how and why.

As the leading international auction houses with regional headquarters in Hong Kong have all moved into significantly expanded new local premises over the past 18 months, you’d be right for viewing the years 2023 and 2024 as a watershed for the industry. It might also be tempting to think these removals were linked to the end of Covid-19 restrictions, but that would be a surmise too far: the relocations were in the pipeline long before the pandemic began. Nonetheless, these gleaming new showrooms, retail spaces, galleries and salerooms do serve as a visual reminder of the differences between the auction houses of today and their incarnations 15 and even 10 years ago, a transformation certainly accelerated by the three-year-long global pestilence.

The spate of relocations began early last year, when Phillips moved into its striking new Hong Kong HQ in West Kowloon’s WKCDA Tower – the edifice was designed by no lesser architectural practices than Herzog & de Meuron, and LAAB – which spreads over six floors and includes an exhibition space and saleroom. That was followed at the end of July this year by the long-awaited and much-teased opening of Sotheby’s new Asian headquarters, which occupies a large and highly public chunk of Landmark Chater in the heart of Central district. This spectacular space – Sotheby’s refers to it as a Maison, a term currently in vogue among many European luxury houses – comprises several Salons, each of which houses an unusual yet beautifully presented display of pieces seemingly unrelated yet somehow linked thematically, as well as a ground-floor exhibition area that’s reached via a dramatic portal and stairway.

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By the beginning of October, Christie’s will also have held its first live sales – lots include the wildly important first-ever auction sale of Monet’s Nymphéas, and Tryptich, a rare masterpiece by the Chinese artist Zhou Wou-Ki – after relocating its Asia-Pacific headquarters to the sixth floor of The Henderson, a new focal point in Central that’s the work of Zaha Hadid Architects. The new space is “designed to be agile and multifunctional”, thus significantly reducing waste from temporary build-outs. As for Bonhams, the privately owned British company already set a precedent 10 years ago when it became the first global auction house to open a dedicated saleroom in Hong Kong. Under managing director Julia Hu, who was appointed to the position in 2022, business has surged: Bonhams’ 2024 spring sales registered a year-on-year growth of 33 percent, and by the end of this month the auction house should also have moved into its new Asian HQ in Six Pacific Place.

Impressive though these new addresses are, they’re also emblematic of a profound and rapid upheaval in the industry, one that’s linked to the rapid growth in online trading and globalisation, as well as a generational shift that’s almost as seismic. Whereas auction houses once relied on live sales in London, New York, Paris, today their business is truly worldwide, implemented via a range of platforms that enable them to cater to fast-growing markets such as East Asia, where many clients are considerably younger than the companies’ traditional customers.

Indeed, these changes have proved so transformative that both Christie’s and Sotheby’s now even hesitate to refer to themselves as “auction houses” – witness Sotheby’s Asia chairman and worldwide head of Asian art Nicolas Chow, who says, “While auctions are within our DNA, we see Sotheby’s as far beyond an auction house.” Pointing to the company’s new Maison as an illustration of that vision, he explains, “[Our objective] is to establish it as the pivotal cultural hub in Hong Kong, a destination for artists, collectors and enthusiasts. Far beyond the conventional gallery setting, the two-storey Maison unveils an innovative dual concept: the ground floor unveils a state-of-the-art, museum-quality space designed to deliver truly immersive aesthetic experiences, while the first-floor houses Sotheby’s Salons with an eclectic cross-category retail experience, which we aim to be the most exciting in town. The expansion underscores our commitment to enrich our offerings and nurture the collecting scene in Hong Kong and beyond, inviting visitors to enter … a portal to boundless inspiration and discovery.”

That refrain is echoed by Christie’s Asia-Pacific president Francis Belin, who describes the company as “a world-leading art and luxury business. [Although] we’re renowned and trusted for our auctions, which remain a core part of our business, Christie’s has evolved into a leading global platform for art and luxury, providing a portfolio of services that includes private sales, art appraisal, art financing and education, offering a more comprehensive, accessible and engaging experience for clients and audiences worldwide.”

By contrast, Bonhams’ Hu, who’s only too happy to wave the flag of tradition, says, “We’re proud to be described as an auction house. Bonhams was founded in 1793 and – along with Christie’s, Sotheby’s and Phillips – is one of the original four Georgian auction houses. It’s a business model that’s adapted over the centuries, but at its core is the service of providing a platform to seamlessly connect buyers and sellers of fine art, antiques and collectables.” She’s joined in those sentiments by Meiling Lee, Phillips’ head of modern and contemporary art. “Phillips is an auction house,” Lee says unequivocally, while nonetheless enumerating the ways in which that definition is changing. “It’s also a global platform for buying and selling 20th- and 21st-century works. Besides regular live and online auctions, we also have items available for immediate purchase through private sales and an e-commerce platform called Dropshop. Our Private Sales team organise selling exhibitions and pop-up exhibitions across the globe, offering selling and buying experience based on the traditional retail gallery model.

“We also operate Phillips PerPetual, which offers a boutique experience to clients for both the sale and purchase of fine and rare watches. It’s headquartered in London’s Berkeley Square and we opened a branch
in Hong Kong’s Pedder Building last year. Moreover, Dropshop is a digital platform offering limited-edition releases of primary-market art and objects in partnership with the artists, collaborators, and brands defining contemporary culture.”

However they choose to describe themselves, the ways in which each of the four companies operate have broadened dramatically – though all affirm that the live, physical auction, with its attendant theatre and excitement, remains at the heart of their Business. However, to the undoubted drama of the saleroom should now be added selling exhibitions, retail stores and, of course, the extraordinary recent expansion in online commerce, which, says Lee, “has significantly impacted the way [Phillips] does Business in various ways. We now prioritise establishing a strong online presence and are constantly improving the website and app experience … Traditional advertising methods have shifted to digital channels with social media, iNFLuencer marketing and targeted ads playing a crucial role.

“It also means we can sell to people all over the world. We’ve seen more and more participants in our auctions beyond local markets. For example, a live watch auction held by Phillips in Hong Kong could attract participants from more than 60 countries.”

At Bonhams, Hu notes how online auctions have been embraced by all demographics and helped unlock new demand. “In particular, this has encouraged greater participation from the younger, tech-savvy generation, who may have previously felt uncertain about in-person bidding in an auction room. Our 2023 global figures underscore this change, with the number of lots sold online surging by 45 percent and online auctions increasing by 105 percent over the previous year. This shift has enabled us to take in a greater volume of items and offer them across a wider range of price points, expanding our ability to serve an even broader clientele.”

As to whether the rise in online auctions is likely to signal a reduction in the traditional format, Sotheby’s Chow says, “Not at all. In fact, our online platforms complement our live auctions, as they allow us to reach different audiences across the globe. We also recently introduced Sotheby’s Sealed, an online platform that combines the discretion of a private sale with the thrill of an auction – alongside the launch of Salon at our new Landmark Chater Maison, this format offers fine art and luxury goods all year round in a thrilling curated setting, enabling clients to buy and sell beyond the traditional auction calendar.

“In the post-pandemic era, however, there’s a yearning for physical experiences. We’ve been planning a physical-first experience for our Maison, alongside the on-going online initiatives, aiming to push to the absolute limit aesthetic experiences, as one might expect from the most progressive museums in the world.”

Belin at Christie’s concurs that digital sales form part of a balanced approach that enables to house to stay relevant, reach a wider global audience and provide a more comprehensive service, complementing the core live-auction experience rather than replacing it. “The emergence and growing influence of younger, digitally savvy buyers who are increasingly driving the art and luxury markets was a key driver of these underlying trends. This demographic shift was gradually pushing the industry to adopt a more digitally enabled presence, even prior to the pandemic.

“We’ve worked to carefully balance these digital advancements with the in-person experience of Christie’s. Art and luxury are about the connection with the object and the dialogues our clients have with our specialists, and therefore the physical experience remains important in the journey of collecting.”

Citing how Sotheby’s is constantly on the lookout for innovative ways of expanding its reach, Chow says the company held its first online-only auctions in 2016, more than three years before the pandemic began. “Since then, it’s been a growing segment of Sotheby’s sales – and our commitment to offering dynamic sale formats continues, with technology making engagement easier than ever. Our app and online bidding platform allow clients to participate in live auctions remotely, as we’re consistently striving to cultivate new clients and young collectors.”

Perhaps surprisingly, the growth in new client bases has led to no significant geographical market shift at Bonhams, whose Business Hu says is international. “Since 2022 we have 14 salerooms, and our Business is evenly split between the US, Europe and Asia. In fact, Asia has always been a beating heart for us, and we continue to see strong Business momentum in the region. Our Hong Kong Spring auctions in May-June achieved a 33 percent year-on-year increase, totalling HK$270 million. The opening of our new Asia headquarters in Six Pacific Place this September is driven by the surging demand from collectors across Asia.”

On the Asia’s role in Sotheby’s overall sales, Chow says: “Fifty years ago, Chinese art was where everything began – it’s a category that resonated with our heritage and was widely understood. We then saw a growing interest in modern art, particularly with blue-chip artists, and by 2017 we introduced Western contemporary art at our Hong Kong sales. Fast forward to the present day, when Asian collectors are more globally connected and sophisticated than ever, and Hong Kong sales in the global auction calendar have now become as important
as London and New York. [Asian buyers] are active in global sales, most recently at New York marquee auctions in this May, where [they] accounted for nearly a quarter of the modern evening sale value, including Claude Monet’s Meules à Giverny, which was Sotheby’s top lot of the week.”

Comments Lee, “Although [Phillips’] auctions and exhibitions are primarily held in New York, London, Geneva, and Hong Kong, we’ve also been engaging with collectors and art lovers in cities throughout Europe, the United States and Asia by hosting pop-up exhibitions, events and auction previews. In Asia, South Korea, Japan and Southeast Asia are also extremely important to us, with many important collectors based in these countries and regions. Both South Korea and Japan are mature art-collecting markets since the 1970s, and recently an emerging younger generation of serious collectors are signalling an art-market expansion in these two countries. We’ve been hosting pop-up exhibitions in Seoul coinciding with Frieze since 2022, and this September we’re hosting another pop-up exhibition there. We also just held an auction preview in Tokyo coinciding with the Tokyo Gendai art fair.”

As well as geography, the range of collecting categories offered by a house can also attract a broader spread of clients. According to Hu, Bonhams’ 60-plus categories is wider than for any other international company and covers everything “from cars to teacups. We believe great collecting transcends eras and demographics.

“Collectors at Bonhams come from all ages, professions and economic backgrounds – they’re all equally important to us,” she says. “The young person who’s starting a collection of, say, porcelain, is obviously very important to the business and to the category itself. We do find that categories such as pop culture, which covers memorabilia from rock stars and their instruments – Rory Gallagher’s guitars are coming to auction in October and we previously sold George Harrison’s guitars – particularly appeal to those who want to remember their youth. Prints are also an evergreen favourite with all age groups and entertainment memorabilia has been gaining popularity too. Our 100-percent-sold The Crown Auction in 2023, featuring items related to the acclaimed Netflix series, was a huge global success that demonstrated widespread appeal.”

As the various modes and platforms for conducting business continue to both broaden and evolve, we can expect an intensification of all these trends, as well as a growth in cross-category collecting that Chow says will be especially prevalent in Asia. “A new generation of collectors has emerged, which reflects a broader demographic shift in recent years, fuelled by the growth of art information that’s now readily available online. At Sotheby’s Hong Kong sales in April, millennials aged below 40 accounted for 55 percent of all bidders. And unlike collectors from decades past who are often very specific in what they collect, it’s incredibly difficult to predict what will the present generation collect next. We have cases in the region where the same buyer might collect across many fields, from a contemporary painting or a musical manuscript to a dinosaur or a piece of Chinese furniture. As today’s clientele embraces a more eclectic approach this idea will guide the way we curate our spaces in the new Maison in Hong Kong.

And, of course, there’s AI, which, as in so many other fields of endeavour and enterprise, is also likely to transform the auction business. “We’re exploring the possibilities of AI, both in terms of how it can add value to our ways of working, and how it can be utilised to improve the services we provide, says Belin at Christie’s. “For example, on our WeChat mini-programme, we recently introduced AI translation to make international sales information available in Chinese.”

Likewise, Hu says the technology will play an increasingly central role in Bonhams’ operations, from streamlining processes to improving customer service. “Personalised recommendations, data analytics, virtual assistants and predictive modelling enabled by AI will empower us to better anticipate market trends and strategically curate our offerings. The future may even bring heightened collaboration between houses and AI experts to unlock opportunities that reshape the auction business.

“Closer to home, the evolving local auction landscape, marked by the expansion of saleroom capacities, is driving changes in how houses structure their sale/event calendars. This allows auction houses to strategically curate a greater variety of sales and events, aligning them with major global and regional art world happenings to better serve their client base.”

In this brave new world enabled by Technology, the auction ecosystem is already touching more lives in more places around the world and in a greater variety of ways than ever before. And with a bewildering array of rare, beautiful and desirable objects – from Botticellis and Birkin Bags to Bentleys and Blancpains – all within bidding distance at the simple click of a computer mouse or tap on a phone, will any of us be immune to the urge to log on, bid and buy? Time will only tell.  

(Header: The ground-floor exhibition area at Sotheby’s new Maison)