Online art market worth an estimated $1.57bn
A future generation of art buyers is likely to make their first art purchase online, with almost 25% of 20 – 30 year olds surveyed saying they first bought art online without seeing the physical piece, according to new research from insurer Hiscox.
The Hiscox Online Art Trade Report 2014 found that click-and-buy – which means online art buying platforms with an online presence only, rather than a physical space – is becoming an increasingly trusted channel for buying art, with as many as 40% of those surveyed having bought art and collectibles in this way.
The report estimates the value of the online art market in 2013 to be around $1.57 billion and anticipates it will rise to $3.76 billion in 2018 – highlighting the opportunity for growth. Based on these figures, online art buying accounts for 2.4% of the estimated value of the global art market, which in 2013 was $65 billlion.
In 2013, internet giant Amazon Art entered the market and there have been reports that eBay is planning a new, rival online art and collectibles platform. Significant increased investment into platforms like Paddle8, Artsy and Artspace indicates continued confidence from investors and belief in the long-term potential of these businesses.
The Hiscox report examined trends in buying art directly through online art selling platforms including Auctionata, Paddle8, 1stdibs, Artspace, Artsy, Artuner and Artfinder, as well as those which combine offline and online business such as Christie’s and Sotheby’s. It looked at what people were buying, for how much and what their main concerns were when buying in this way. It also asked which kinds of services could be offered in order to increase confidence among existing and potential buyers.
This year’s survey also revealed that while there is growing confidence in the online art market, it will always co-exist with traditional galleries and auction houses, with 56% responding they still prefer buying from a physical space and a much smaller 10% saying they prefer buying online. The inability to inspect the physical object remains the biggest hurdle, with 82% saying this was the most difficult aspect of buying work online. However, this barrier could at least in part be alleviated by more detailed information, with condition reports and certificates of authenticity being cited by 94% and 84% of respondents respectively as ways to increase buyer confidence.
Robert Read, Head of Fine Art at Hiscox, explained: “Young collectors are looking for art work which is easy to buy and available at a wide range of prices. Online art platforms cater for all tastes and budgets, but are particularly effective for those just starting to collect – opening up the art market in a way that is hard to replicate in the real world.”
44% of buyers said they had spent more than £10,000 purchasing art and collectibles online so far, with 21% of this group saying they had spent in excess of £50,000. Limited edition prints are a popular entry point for online art buyers –55% of those surveyed had purchased a print directly via an online platform in the last 12 months.
Although the price point at which first time buyers are entering the market is fairly low, with 42% saying they had spent under £1,000, amongst repeat buyers of art using online platforms, 45% are prepared to spend £5,000 or more. Buyers are also generally very happy with their online buying experience, with 65% reporting they are extremely or very satisfied, and only 8% saying they were unhappy.
Robert Read added: “The online art market is rapidly evolving as businesses seek out a winning formula which appeals to collectors of all kinds, from those just starting out to those who are already established. For traditional galleries and auction houses, there is an opportunity to build on what their brand has to offer in the real world and to translate this into online business, though it remains to be seen to what extent this happens and how it affects their businesses.”