Hong Kong auctions a first test for Rebecca Wei, Christie’s new president of Asia
All eyes will be on Wei as Christie’s in Hong Kong holds its 30th anniversary auctions in the face of a weakening economy that has stayed the hands of Chinese art buyers after a decade of uninhibited spending
Rebecca Wei goes about with a noticeable swagger these days. On March 22, an awkward parenthesis was removed from her title at Christie’s. Formerly the auction house’s Asia president (excluding China), Wei was running much of Hong Kong, the regional headquarters, and the region under Asia Pacific chairman Francois Curiel. Now, she has been handed the important but idiosyncratic China market, too.
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Wei describes the move as bringing together the leadership team in Hong Kong and Shanghai. That seems like a no-brainer when so many Chinese buyers are regulars at the Hong Kong auctions – people like Shanghai billionaire Liu Yiqian, who set a new auction record for Chinese works of art when he bought a 15th century Tibetan tapestry at a Sotheby’s sale for HK$348 million in 2014. Their business is not just important to Hong Kong and China.
Liu, for example, revealed the extent of his appetite for Western art when he paid US$170.4 million for Amedeo Modigliani’s 1917 Nu Couché in New York in November 2015. When he attended the March 31 opening of Christie’s new Anniversary Gallery in Hong Kong’s Central district, an event to commemorate the auction house’s 30th year in Hong Kong, a specialist was eager to show him Monet’s Le Bassin aux Nymphéas (1919) ahead of its auction on May 12 in New York.
But Wei is taking over just as many Chinese buyers are taking a breather after a decade of uninhibited spending, and her first real test will be the week-long spring sales, starting on May 26, which celebrate the company’s 30th anniversary in Hong Kong.
The highlights include Meat No. 3: Nativity, a painting by Zeng Fanzhi, and Summer on California Mountain by Zhang Daqian. The most valuable lot is the five-carat Aurora Green, the largest natural, fancy, vivid green diamond in the world, with an estimate between HK$125 million and HK$155 million.
That seems a lot of money in a weak economy.
According to the latest TEFAF Art Market Report, a widely quoted global study, the Chinese market shrank by 23 per cent in 2015 from 2014.Buyers from China accounted for about 45 per cent of Hong Kong auction purchases in 2011, a year when China briefly became the largest art market in the world, outranking the US and Britain, with a 30 per cent share worth about US$13 billion. But last year, China retreated to third place, with 19 per cent of the global market. Kevin Ching, the chief executive officer in Asia at Sotheby’s, Christie’s main rival, has said buyers from China accounted for only 20 to 30 per cent of Hong Kong sales in 2015.
With New York now the undisputed leader, with a 43 per cent share of the art market, it remains to be seen whether international auction houses will continue to invest heavily in Asia.
Under Steven Murphy, chief executive of Christie’s from 2010 to 2014, the 250-year-old auction house expanded its reach in Asia after a decade when soaring stock markets and property prices created unprecedented wealth in China. Christie’s held its first Shanghai sale in September 2013. That year, it became the first foreign auctioneer to be allowed to set up a wholly owned China subsidiary after the firm’s owner, the Pinault family in France, gave a pair of bronze animal heads taken from the Summer Palace in 1860 to the Chinese nation.
The Shanghai sales were headed by Cai Jinqing, who joined Christie’s as managing director, China, at the same time Wei joined as general manager, Asia. Both are mainland Chinese with successful careers outside the art world. Cai was a partner at public relations company Brunswick, and Wei was a partner at consultancy McKinsey & Company.
Wei’s latest promotion has prompted speculation about Cai’s future role at Christie’s, and whether merging the Shanghai and Hong Kong teams will lead to cuts.
Wei rejects the notion, saying, “We are leveraging the huge back office in Hong Kong. We have close to 45 people in Beijing and Shanghai, which is quite sizeable compared to other international auction houses. Here we have about 200 people and all the department heads are here. Under one leadership team, it will become much more efficient.”
Cai, who becomes chairman, China, remains part of the new Asia leadership team, Wei says.
“She knows China inside out. I am from [China], too, but I haven’t been managing the [China] business for the past three years. So she’s a great sounding board for me. We work as a team,” Wei explains.
Christie’s is about to open a new office and gallery space In Beijing. With Hong Kong also having just opened a new gallery space, Wei says Christie’s clearly thinks that Asian clients, who contribute 25 to 30 per cent of global sales, are as important as ever.
But she admits China remains a long game. Three years after Christie’s first Shanghai auction, total sales only came to US$25 million in 2015 compared with the overall Asian result of US$806.2 million, of which the bulk of business was done in Hong Kong, where there is no tax and very few restrictions on what is bought and sold.
Today, foreign auction houses are still banned from dealing in Chinese works of art created before 1949, or in so-called cultural relics in China.
Wei has not seen any signs that the new Shanghai Free Trade Zone is boosting luxury imports to the city, and things are not looking upbeat in Hong Kong, either. As the number of tourists from China dropped, retail sales between January and March fell 12.5 per cent from the year before. Luxury brands from Tag Heuer to Coach have closed their flagship stores in the city.
The factors behind the lower spending – slowing economic growth, President Xi Jinping’s crackdown on corruption and Chinese consumers’ growing habit of spending their shopping holidays farther away – are all showing up in Hong Kong’s auction rooms, too. In 2013, Hong Kong accounted for 17 per cent of Christie’s global sales. For the past two years, that fell to just 12 per cent even as new Asian collectors continue to emerge. Two of those were active in the New York sales last week. Yusaku Maezawa, a young Japanese internet entrepreneur, bought a Jean-Michel Basquiat painting for US$57.3 million, including buyer’s premium, and several other paintings. Beijing internet entrepreneur and investor Edward Zeng bought an Yves Klein in New York for US$3.3 million including buyer’s premium.
Still, the first set of spring auction results in Hong Kong this year might suggest a certain resilience in the categories sold in Hong Kong. Both Sotheby’s and Poly Auction Hong Kong sold more than they did in the corresponding sales a year ago, whereas in New York last week, Sotheby’s, Christie’s and Phillips all sold far fewer Impressionist, modern and post-war paintings than they did a year ago.
Wei says she chooses to look beyond the short-term ebbs and flows since Asia is only just making a start. “I have seven departments here. In New York and London, they sell something every day … We can add a lot more departments. Ten years ago, we didn’t have handbags here. Twenty years ago, we only just started the Asia contemporary art department. So in 10 years’ time we ought to be a lot more diversified and bigger. Maybe have Impressionists/modern/post-war contemporary specialists here selling in Hong Kong,” she says.
Also, Christie’s geographical presence needs to expand. “We are in Shanghai and Beijing in China. Maybe we can have another two or three offices in [China], given how vast the country is,” she says.
Dealers in Hong Kong say that the international auction business has changed beyond recognition since 1986, when Christie’s held its first Hong Kong sale.
“Some rules are out the window. For example, there are a lot more compromises. Before, dealers like my father would just go in on his own and keep everything to himself,” says Andy Hei, who learned the antiques trade from his father, Hei Hung-Lu.
“Now, there is a lot more information exchange before each sale, especially between dealers and the auction houses. It’s part of the corporatisation of the auction industry.”
Christies’s and Sotheby’s, which form a duopoly at the high end of the auctions market, have been trying to grab market share from each other by offering clients better deals, which can cut into profit margins. Their tools include financial incentives to sellers, or consigners, in order to secure the right to sell very attractive items. All this came to a head when Sotheby’s gave the family of its former chairman, A. Alfred Taubman, a guarantee of US$500 million from the sale of his art collection – it only fetched US$377 million. Such arrangements are much rarer now, although the seller of the Basquiat in New York last week received a guarantee.
Wei says that Asia, where there are still far fewer US$10 million-plus lots sold, has never seen such aggressive tactics. However, that doesn’t mean the two houses don’t give guarantees. The height of the practice was probably in 2013, the year of Sotheby’s 40th anniversary in Hong Kong. In 2013, shortly after Sotheby’s sold Zeng Fanzhi’s Last Supper for a record HK$180 million, including commissions, Christie’s secured the sale of another high-value Zeng after it offered the owner of Hospital Triptych No. 3 a guarantee. That work eventually sold for HK$113.2 million including commissions.
Today, Zeng’s works no longer fetch more than HK$100 million, and artwork by fairly well-known artists can be bought for tens of thousands of Hong Kong dollars. At Sotheby’s spring auction, the Origo Collection of contemporary ink art sale was billed as a success, with 68 of the 83 lots sold. However, half of the lots were sold for less than the lowest estimates, with some pieces going for as low as 40 per cent of the lowest estimates.
Wei says Christie’s way of getting consignments and good sales will come down to client management.
Under Patricia Barbizet, Christie’s CEO since 2014, the auction house has become more client-focused, Wei says, with a new customer relationship department set up in London, New York and Hong Kong. “My job is to train the customer relationship managers and maybe be a role model for them. They have to read the clients’ needs when specialists don’t have the capacity to do so,” she says. These include whether someone wants to be wined and dined all the time, or left alone, she explains.
“If clients don’t trust you, they ask for crazy terms. If they know you can get the target buyers they will give you the consignments without them. If we don’t say no sometimes, you end up killing yourself. I don’t want to commit suicide,” she says.