The art market reacts to Covid-19

Although confinement measures are clearly a curse for an entire ecosystem dependent on the circulation of art fans and collectors, art market professionals intend to keep themselves active by adapting to the new situation, or even by reinventing themselves. In most cases this will involve some degree of federation as well as a significant expansion of their online strategies.

Safe activity picks up in Hong Kong and Shanghai

While European countries are imposing partial or complete lockdown with all cultural events, exhibitions, fairs, auctions etc. either cancelled or postponed, Phillips announced on 18 March that its Hong Kong spring sales will be held as planned from 29 May to 2 June at the JW Marriott Hotel.

Likewise, in Shanghai, the MadeIn Gallery has announced it is reopening as the Chinese authorities have managed to stabilize the Covid-19 epidemic in the city. The safety measures applied to visitors remain strict: face mask during the visit… checking of QR code proving residence in Shanghai… and body temperature controls at the gallery’s entrance.

Asia, digital rescue and solidarity…

Art Basel Hong Kong was the first major art event to announce its cancellation due to COVID-19 (in January 2020). The fair’s organizers reacted quickly by setting up a digital fair, so that exhibitors could present, free of charge, the works they intended to show at Art Basel. The fair will therefore host virtual stands for 231 galleries on the dates initially planned. Some galleries are already communicating on this new tool.

Times are tough for the Hong Kong market. After months of protests, the coronavirus epidemic has struck yet another blow. Postponements of auctions in Hong Kong and mainland China began back in January (Christie’s, Bonhams, China Guardian, Poly Auction, etc.). In mid–March, Francis Belin, President of Christie’s Asia Pacific, said that his business was going through a difficult period. He added that about 40% of new buyers are recruited through online channels, and that most of this growth was of Asian origin.

In general, the major auction houses have plenty of experience with online sales and are perfectly equipped to switch their prestige sales into the digital sphere. In 2019, online sales had already increased significantly with Sotheby’s notably posting a 25% increase.

Hong Kong art dealers have been experimenting with digital marketing since the coronavirus crisis began, and their new strategies are starting to bear fruit. But beyond the purely commercial aspect, several players in Hong Kong’s cultural ecosystem have joined forces in March to launch the non-profit organization Art Power HK, an online platform publicizing events and exhibitions with the objective of boosting their resilience and disseminating the cultural news of one of the world’s most dynamic artistic capitals.

The idea has spread to France where the Parisian gallery owner Georges-Philippe Vallois has called for a pooling of galleries to create “a common sales platform”.

Europe on hold…

Declared a ‘pandemic’ by the World Health Organization (WHO) on March 11, the COVID-19 virus has spread around the world. In order to comply with government recommendations for containing the spread of the virus, museums, art fairs, art galleries and cultural centers have had to take immediate action and comply with the new rule of compulsory closure until April 15, bringing the culture industry to an almost complete standstill. Exhibitions (commercial and non-commercial) and public auction sales have therefore been cancelled or postponed, often to as yet unspecified dates, reflecting the difficulty of changing the planning for such events.

Italy was the first European country affected by the coronavirus epidemic. It is still the worst hit country today in terms of public health and economic consequences. ‘Places of culture’ such as theaters, cinemas, art galleries and museums were the first to be closed. Since then – between March 12 and 14 – the French authorities decided to impose similar measures, closing all non-essential premises that are normally open to the public, and all planned auction sales have been “postponed to later dates”.

On March 11 the world’s largest art fair, the Tefaf in Maastricht, closed prematurely after five days of opening. Although lots of robust transactions took place in the first few days (see our 5 views of Tefaf), the closure was obviously a blow for exhibitors counting on this major event for their economic survival. Only three galleries (Wildenstein & Co, Galerie Monbrison and Fergus McCaffrey) among the 285 exhibitors had anticipated the risk by cancelling their participation at the last minute. Two days later, Brussels’ major Contemporary art fair, scheduled for late April, was postponed until the end of June.

On March 16, it was Germany’s turn: after announcing the postponement of Art Cologne, the Association of German Art Dealers asked the government to lower the sales tax on artworks, hoping to minimize the negative impact of the health crisis on their activities.

The closure of all museums obviously represents a serious blow to the cultural sectors of the countries concerned. In Europe, a number of galleries have unfortunately already gone into liquidation, lacking sufficient funds to cover the shortfall in revenue from cancelled events. The majority of active galleries are turning to the digital sphere, offering virtual visits and conducting online sales and purchases.

At the time of writing (March, 18), the United Kingdom has not kept pace with the public health restrictions adopted elsewhere, including in the United States where the major cultural institutions have closed their doors. London’s museums are open and public auctions are maintained… but the situation is changing by the hour, and the British government will no doubt impose stricter measures.