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In 2020, the art auction industry is synchronized with the times, witnessing a great change in a century. With its resilience, it ushers in the opportunity represented by the explosion of electronic platform trading.
Because of the lag in the art market, we have to be vigilant all the time. In particular, the global industrial supply chain operation is still blocked due to the COVID-19 pandemic, making 2021 still full of challenges. But now, with more knowledge of the virus and more experience in dealing with problems related to the pandemic, we have gained more calm.
At present, the consignment for Spring Auction 2021 has been launched. Through online/offline consignment and directional visits to famous collectors, China Guardian tries its best to seize opportunities to gain the first chance in the supply chain of artworks.
Hu Yanyan, China Guardian CEO
As a leader in the auction industry, China Guardian has already started the public offline consignment in six major cities in China and global online consignment. With almost no delay, it carried out the spring auction in 2021 according to the established plan. China Guardian CEO Hu Yanyan once again shows us the importance of "precise strategic layout" and the business team's sensitive capture of the art collection market.
First, the electronic trading platform, constructed in 2017, played an important role in 2020. In the same year, the total turnover of the company's online auctions, including online bidding auctions and online-only auctions, reached 760 million yuan, with a year-on-year increase of 936 percent. Eleven online sections were planned, with a turnover of 185 million yuan.
Second, the company had set up branch offices in Hangzhou and Nanjing in 2019, increasing the connection between business personnel and customers. It not only stimulated potential customers in the region, but also directly gained more artworks for 2021’s consignment.
China Guardian Autumn Auctions 2020
Finally, China Guardian shed all difficulties in 2020 and completed the spring and autumn auctions as expected, restoring normal auction pace in 2021.
Those are just a miniature. In the past 30 years of China's Guardian, saving against a rainy day has got the best reflection at present.
The crisis of the next stage of the art market still exists. Artron.net has a special dialogue with Hu Yanyan, talking about the industry’s dilemma to possible cross-border competition, and then to the online auctions in 2021. Let's see how China Guardian chooses to go forward in the tide of the times.
Artron.net × Hu Yanyan
Saving against a rainy day
Means more chances for the company
Artron.net: Now it seems that at least in the first half of 2021, the traditional consignment season, with strict traffic restrictions for epidemic prevention and control, did you still carry out the consignment as scheduled?
Hu Yanyan: The China Guardian 2021 public consignment in China is in progress. We have selected six cities for this consignment. Affected by epidemic prevention and control, we changed the previous consignment process and added the screening of artworks before meeting with our clients. From the results, the consignment from the Shanghai office made some achievements and gained good results.
The consignments in the three traditional cities of Guangzhou, Nanjing and Hangzhou have just finished. In addition, Jinan, a new city, has been added this year. Overseas consignment has basically stopped. In the first half of this year, the consignment will focus on the cities along the high-speed railway in China.
China Guardian Global Consignment for Spring Auctions 2021
Artron.net: Overseas consignment also should be conducted online. If online consignment in 2020 is a sudden emergency measure, what improvements will be made in this year's overseas online consignment?
Hu Yanyan: Since the pandemic, the auction houses’ face-to-face working mode has been completely broken. Using the internet, "meeting and consigning online" is a new attempt.
At the beginning of the pandemic in 2020, customers and our business personnel all hoped that it could return to normal in the second half of the year. Thus, many of them were "talking in vain" through e-mail and telephone. Of course, China Guardian could not achieve such a good turnover of 4.8 billion yuan without the trust and support of customers in 2020. There also were many long-term cooperation clients who sent their works to us from afar without meeting. This year's key task is to build a platform to meet guests on the internet and implement the signing of contracts.
China Guardian Hangzhou, Nanjing Offices were set up in 2019.
Artron.net: I remember the Hangzhou and Nanjing offices were established in 2019. At that time, no one could predict that the COVID-19 pandemic would break in 2020. However, China Guardian seems to be preparing for a rainy day and getting better feedback at present. In terms of consignment, what kind of interaction will there be between branch offices and the Beijing headquarters?
Hu Yanyan: The branch office is like a feeler. Through this feeler, we can receive the local signals, and it is more convenient for customers to interact with China Guardian. The data in 2020 also shows that the performance of the two offices in Nanjing and Hangzhou was good, making Jiangsu and Zhejiang provinces become the regions with higher performance rankings. Last year, China Guardian’s new customers increased by 400 percent year-on-year, among which a considerable number of customers were from the internet. In the follow-up, through the active contact of the company’s branch offices, a certain proportion of online customers who have never met with the company have been transformed into offline customers.
Lot 11023
Zhang Daqian Landscape
47.5×36 cm
Price Realized: RMB 552,000
25th China Guardian Online Auction
Artron.net: Yes, I remember chatting with you a few years ago. The industry focused on guessing which art categories potential buyers might like. For example, jewelry may be an entry-level category. But this year, the industry is focusing on connecting with these completely new buyers through the internet.
Hu Yanyan: Take our first online auction in 2021 as an example. This auction has 26 sections, and its categories are extremely rich, including Shoushan Furong seals, seals cut by famous people, books of ancient and modern famous people, Maotai, whisky, Pu’er tea, Hermes bags, Real Madrid CF sport shirts, Chinese paintings and calligraphy, furniture, inkstone, incense tube, flower pad, emerald, diamond, and jewelry. These auction items can appear in front of buyers thanks to the huge supply chain established by China Guardian and the careful selection by dozens of experts from nine business departments. Perhaps people had not guessed right. In 2020, our online buyers had the highest participation in ancient books, including letters, rubbings and ancient books.
New changes in 2021
China Guardian online auctions will present more artworks
Artron.net: Since 2017, China Guardian has started to build its own online trading platform. From a commercial point of view, what is the profit? Under the strong pressure of the offline auction, what is the judgment of still insisting on developing an online auction?
Hu Yanyan: It seems that the online transaction is managed by machine in all aspects, and it seems to save labor costs. However, for the art auction market, an attractive auction needs unique artworks with aesthetic feeling, history and creativity. Therefore, the number of excellent artworks is limited due to the market’s particularity and scarcity. The scale of this market cannot be enlarged indefinitely. The "cost savings" advantage of the internet has not yet emerged. From the perspective of business logic, investment in the early stage is quite large, and income can only be realized when the business becomes bigger afterwards, which depends on whether we can firm our faith and do it.
Embracing the internet is a catchword today, and it is unavoidable for every traditional enterprise when looking forward to the future. Whether you are willing or not, the internet era has come.
Lot 12519
Zhou Chunya Green Dog
4/486×70 cm
Price Realized: RMB 184,000
25th China Guardian Online Auction
Looking back, the process is like this: In 2017, we started to do digital enterprise management. After completing platform construction, we started to do online auction trading platform at the same time. The turnover of the first online auction in 2018 was 5.09 million yuan. And the online auction continued in 2019, with an annual turnover of 16.02 million yuan, which is a small step. In 2020, the China Guardian online trading platform played an important role during the COVID-19 pandemic, with 11 auctions in the whole year, a total of more than 6,000 artworks were sold here, achieving a turnover of 180 million yuan. For China Guardian, it is a natural thing, but also an opportunity.
At the beginning of the pandemic, Wuhan announced the closure of the city on Jan 23, 2020. To tell the truth, at that time, we were panicked and at a loss. A week later, we started to organize an online charity auction. More than 120 artists and 23 collectors and institutions donated their works, and finally a turnover of 15.7456 million yuan was achieved. All the money was donated to medical workers, and our public welfare goal of aiding and fighting COVID-19 was achieved.
Zhi Cheng---China Guardian Online Charity Auction
This successful online charity auction greatly accelerated the company’s online auction pace.
Lot 11521
Exquisite 22.68 carat natural Columbian Emerald Necklace
with colored gems and diamond pendant
Price Realized: RMB 184,000
25th China Guardian Online Auction
Artron.net: At that time, your online auction team and the offline business team overlapped. Maybe everyone knew that China Guardian was a team that collected important artworks worth 100 million yuan worldwide. How could you balance or arrange for putting so much energy into online auctions?
Hu Yanyan: That's a good question. There is no doubt that China Guardian is an auction company focusing on high-end art, and star artworks are indispensable here. Twenty-five percent of our annual turnover comes from items with a unit-price of more than 10 million yuan. While items with a unit price of less than 100,000 yuan were many in quantity, they contributed not so much to the market. With the advent of the internet era, the situation has changed. The performance of online auctions makes us firmly believe that the top and the bottom of the pyramid are both promising in the future. Fortunately, China Guardian has never been partial to any end. We have the most high-end night auctions, large-scale spring and autumn auctions, the budget-friendly quarterly auctions favored by the industry, and the online auctions with high frequency, exquisite categories and good taste.
Lot 12075
Hermes 2007
Birkin bag in bright black and apple greenPorosus
Crocodile skin and silver accessories
35cm
Price Realized: RMB 287,500
25th China Guardian Online Auction
Our pace and team will be changed in 2021. With the reduction of the impact of the pandemic on people's lives, the auction business department should focus on the spring and autumn auction. As an electronic trading platform that appears every month, online auction is suitable for emerging collection groups and shows an active, interesting, rich and personalized attitude. The China Guardian business team will fully demonstrate its own innovation ability.
The lag of the art market may appear
From the 80/20 Rule to the Long Tail Effect
Artron.net: In fact, for both online and offline auctions, there are challenges and difficulties, but there are also achievements, which are better than expected sometimes. What are the reasons for this result?
Hu Yanyan: Now, the anxiety about market uncertainty at the beginning of 2020 is all over. It seems that art auctions suffer less than other industries. The result was not bad.
The trading volume is small, maybe it's one of the reasons. At the same time, I think we still can't take it lightly. Unlike the consumer goods and manufacturing industries, the market effect of art trade often lags behind. In the first half of 2021, while the world is still blocked, travel restrictions and inability to meet are still obstacles to our work.
Lot 279
Zhu Duru Calligraphy
34.5×46.2 cm
Price Realized: RMB 150,650,000
China Guardian Autumn Auctions 2020
Artron.net: When you talk about 2020, we also have some data to show that last year was the year with the largest number of 100 million yuan artworks in China, and four of the 10 most expensive works in the world came from China. This is because the Chinese auction industry soon returned to the half normal state. But you pointed out that the lagging market effect may appear this year, and it reminds us that we should not take it lightly. Why is there such a prediction?
Hu Yanyan: As we have been talking about, the most anxious thing is still the consignment. Whether we can really get good artworks is still a key matter in front of us. 2021 is not the buyer's market, but the seller's market. The most important thing is how we continue to collect good works when traffic is limited and travel is not free.
Last year, we basically agreed with the seller on several important works. However, as they were overseas, we were unable to talk face-to-face with them at that time. Therefore, we couldn't expect customers to send us their works under such circumstances.
Lot 185
Fu Baoshi Landscape
Fu Baoshi’s painting: 84.5×58.5 cm
Xu Beihong’s poem: 23×58.5 cm
Price Realized: RMB 138,000,000
China Guardian Autumn Auctions 2020
There are relatively fewer high-end artworks in the market, and more artworks with slightly lower prices. But for the art market, high-cost artworks, such as works of 100 million yuan, are a highly indicative star. Looking back, we can fully consider in the post epidemic era whether the 80/20 Rule of the auction industry will become the Long Tail Effect and what we will choose in 2021.
Maybe we will be more realistic and seize all the opportunities, including 25 percent of the high-end works and 5 percent of the bottom. Data also support this point. With the intervention of electronic platform technology, there are more and more online auctions, and the contribution of artworks with slightly lower prices to the whole financial system is increasing. The "long tail" is coming, which may be harder for practitioners. Meanwhile, when the quantity of works becomes larger and larger, we should remind ourselves that we should adhere to our original intention and choose more academic and aesthetic artworks, instead of simply throwing the huge "goods" to the market. We should bring good works to the buyers.
When the market is depressed
China Guardian’s resilience is highlighted
Artron.net: The extension of the business line is bound to bring more challenges to our business personnel. In fact, it also triggers other issues. When the auction houses arrange their auction schedules, they usually wait for both approval from the Cultural Heritage Administration and China Guardian’s schedule, the leader and bellwether of the industry. Especially in 2020, it was even more difficult for many small and medium-sized auction houses to carry out spring and autumn auctions. How can we see the firm confidence of China Guardian in the industry and the significance of the bellwether?
Achievements of China Guardian in 2020
Hu Yanyan: It's like a very real mental journey we just sorted out. From the annual data, China Guardian held three quarterly auctions, one less than in previous years, but 11 more online auctions because of epidemic control in 2020.
Our common idea is to try to maintain the original pace in a very uncertain state. Therefore, after the Spring Auction 2020 in August, we were hesitating whether the autumn auctions should be delayed until the end of December or January 2021. In terms of time, the time for consignment is very short, and we also have a way out to say that we have objective reasons to delay autumn auctions. However, after repeated discussions and due to the uncertainty about the epidemic situation in winter, we made up our minds to hold autumn auctions in November, as usual.
Go ahead in 2021
In the spring of 2021, we need to return to normal. I'm very grateful. In the past year, the company has worked very hard. More than 200 people in the company completed every change and adjustment very well. This is the foundation laid for 27 years. Here I would like to thank our customers. They are always ready to help us, very generous.
As a leading enterprise in an industry that needs a strong reputation, we know the heavy trust we shoulder and we will work harder in 2021.
Artron.net: Thank you for sharing. Indeed, this problem will become more prominent in internal circulation. In the future, people will pay more attention to the price increase of artworks than their authenticity. This undoubtedly requires auction practitioners to become more professional.
China Guardian (Hong Kong) International Auction Co., Ltd
Customer service:( 852 ) 2815 2269
Email address: hkauction@cguardian.com.hk
Address:5/F, Tower 1,LippoCentre, 89 Queensway, Hong Kong
Contacts of our regional offices
Shanghai Office
( 86-21 ) 5466 0508
shoffice@cguardian.com
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( 86-20 ) 3808 8589
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Nanjing Office
( 86-25 ) 8670 2356
njoffice@cguardian.co
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Hangzhou Office
( 86-571 ) 8535 9925
hzoffice@cguardian.com
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Hong Kong Office
( 852) 2815 2269
hkoffice@cguardian.com.hk
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Taiwan Office
( 886) 2 2757 6228
twoffice@cguardian.com.tw
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( 81-3 ) 6206 6682
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( 212) 308 8889 / ( 888 ) 799 8830
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（001）778 865 3308 / 778 372 8358
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