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Sotheby’s has axed its ecommerce business in mainland China less than two years after the auction house committed to expanding its online capabilities there for instant purchases of fine art and luxury items.
Three people familiar with the matter said that in recent months Sotheby’s had shut down its online “Buy Now” programme on the mainland, amid a slowdown in Chinese demand, which for decades buoyed prices of high-end objects.
The 280-year-old auction house has also let go a number of employees in mainland China, according to one of the people and two further sources, who added that some key personnel would stay on in consultant roles.
Sotheby’s launched its “Buy Now” platform in Hong Kong in 2022 and extended it to mainland China in the first half of 2023, as it celebrated 50 years in Asia.
At the time, it said the expansion would lead to “active sourcing in the region for the first time, providing new ways for collectors to buy and sell beyond the traditional auction calendar, granting 24/7, 365-day access to exceptional luxury, fine and decorative art and objects at a variety of price points, and all available for instant purchase”.
Major auction houses, including Sotheby’s, Christie’s and Phillips, had been ramping up online sales in the wake of a pandemic-fuelled luxury boom, as social distancing rules normalised online bidding and purchases of high-end goods. Many auction houses saw such “Buy Now” platforms as a way to capture entry-level clients new to fine art and luxury.
Sotheby’s began holding events in a downstairs space at its China headquarters in Shanghai, partly to help boost “Buy Now” sales, in 2023, but a person familiar with the matter said the company had not hosted any there since May last year.
Sotheby’s told the Financial Times that China remained a “key market for both art and luxury”. It added that it would continue its “Buy Now” programme in Hong Kong, its “main market” where it opened a 24,000-square-foot retail space in July last year. It also moved its Asia headquarters into new, larger premises in the city.
Its Beijing and Shanghai offices remained open and active, and it continued to host events “across China”, it said. Its overall mainland presence remained larger than before it launched the “Buy Now” programme and was now focused on client relations, Sotheby’s added.
The company’s global auction sales dropped 23 per cent year on year in 2024, according to figures released last week. Sotheby’s does not separate out its annual Asia results, but highlighted that some of its most prominent sales were in the continent, including the $32.5mn sale of Mark Rothko’s Untitled (Yellow and Blue) in Hong Kong and of Claude Monet’s Nymphéas (Water Lilies) for $65.5mn to an Asian collector.
The company, which does not publicly disclose full financial results, revealed to lenders an 88 per cent plunge in its core earnings in the first half of 2024, as revenues dropped 22 per cent, the FT reported in August.
In the same month, Abu Dhabi-based sovereign wealth fund ADQ announced it would take a stake as part of a $1bn capital injection alongside existing owner Patrick Drahi, a telecoms billionaire, in an effort to fund growth and trim debt.
Art industry sources said the China pullback was part of a wider retreat, and Sotheby’s confirmed to the FT it had also closed an office in Bangkok. In addition, the auction house began lay-off talks with around 50 staff in its London office last year, the FT reported in June.
“I think they’ve tried really hard to explore many things [that] didn’t go very well,” said a person familiar with the Asian art market who did not wish to be named. “They wanted to go into something really big in China [but] . . . discovered it’s a tough space to be in.”
Reporting by Nian Liu in Beijing, Chan Ho-him and Gloria Li in Hong Kong, William Langley in Guangzhou and Thomas Hale in Shanghai
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