Online auctions: here to stay

In the age of Covid, most of us imagine our lives parallel parked in an alternate universe, an online presence being the only reassuring reality that offers some continuity. As most everything we see, buy or experience moves to the virtual world, online auctions are naturally experiencing a buzz like never before. “As with most digital channels that have facilitated commerce in the absence of [interaction]online auctions have seen a surge,” says Arvind Vijaymohan, Managing Director of Artery India, an art market information and asset advisory firm.

There were 11 online auctions in the first quarter of fiscal 2020, compared to six in the same period in 2019, while the number of assets sold rose to 510 from 459 in the ‘last year. In fact, according to the Artery India Price Databank, between March and July 2020, 866 works of art were sold online, earning Rs 150.1 crore.

As physical auctions evolve online, online auction houses are experiencing their own metamorphosis. “Prinseps has always been an online auction house, but curiously we have now expanded in the opposite direction: online auctions with the addition of a live auctioneer,” says Indrajit Chatterjee, Founder of Prinseps. Additionally, even nonprofits are scrambling to adjust to canceled events and fundraisers using online platforms and silent auctions to connect with their donors.

The palpable energy and tangibility of a physical sale is irreplaceable, especially when it comes to the action around a new world record being set, which is akin to a social event. “The drama that is associated with two engaging bidders, pressured by an experienced auctioneer to break through a record price, is always a delight to behold,” says Vijaymohan. Despite this, he concludes that the ease of an online auction is undeniable, for both bidders and sellers.

Most experts agree that for the next two years or so, all auctions will be online. “In fact, online auctions will undoubtedly retain a higher position in the business pattern even after this,” he says. It is believed that a purely online auction or sale will not sell the absolute top end of the art market, as the marketing of these works usually depends on visual inspections and meetings which may not be currently not possible. “Are ultra-high-end buyers willing to make informed purchases based on images, condition reports and videos of [artworks in] the top end of the market? Are visits made “by appointment only” and under social distancing rules appropriate enough? It’s not clear,” Chatterjee says. In foreign markets (and established art markets) this doesn’t seem to be a problem and the market seems robust. Whether this is a problem for Indian art remains to be seen in the coming months, he adds. However, “the confidence to acquire online, especially assets by the masters, with which a collector is familiar, will only grow stronger,” says Vijaymohan.

Either way, there are usually excellent value propositions at every auction, but research is crucial in this regard. The knowledge of the artist, the importance of the work considered and its independent estimate of the references suggested by the auction house, the condition of the work of art and all information concerning overhead costs (premiums of the auction house, taxes, duties and management fees) must be taken into consideration. This allows a bidder to identify opportunities as well as price traps, and place bids cautiously. As conventional wisdom has it, practice makes perfect. Observe as many auctions as possible; Experience is the best teacher.

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