Hiscox Online Art Trade Report 2021
Welcome to the latest iteration of the Hiscox online art trade report. It feels like we are dealing with two very different universes in this report.
On the one hand, there is the traditional online art market where physical objects are traded and this has matured into a significant and permanent part of the art market – it is almost business as usual. On the other hand, there is the bonkers, volatile and seductive world of NFTs, largely attracting speculators rather than art lovers.
It will eventually settle down and a new hierarchy about which NFTs are valuable and which aren’t will be established; currently lots want to have a flutter, even if they aren’t prepared to bet the house on it. The traditional online art platforms are, in the meantime, frantically playing catch-up and trying to work out how to incorporate it into their businesses – after all, nobody likes to miss out on a party.
Head of Art and Private Clients
NFT buying habits
- NFT gold rush - eight out of ten (82%) NFT buyers said that it was more about the money than the art, with 95% of those spending $25,000 on NFTs in the past 12 months and citing investment returns as the key reason for their NFT purchase.
- Male buyers more motivated by potential investment returns than female buyers: 96% of male buyers bought NFT art for investment reasons, while 58% were driven by their passion for digital art. Far fewer female buyers bought NFT art primarily for investment reasons, at 67%, while 76% bought because of their passion for art and particularly digital art.
- Male-dominated market, but more female buyers are likely this year: Less than a fifth (16%) of female art buyers surveyed said they had bought one or more NFTs, compared to 22% of male buyers who said the same. But 27% of female art buyers said they would buy an NFT in the next 12 months, closing the gap with male buyers (28%).
- Testing the water: Among those art buyers surveyed who had bought NFTs in the past 12 months, 35% had bought NFTs with a total value of less than $1,000, while 37% had spent up to $5,000 on NFTs; only 15% had spent more than $5,000 so far on NFTs.
- The art and NFT markets begin to come together: There are signs of increasing convergence between the traditional art market and parts of the NFT market. Over a quarter (27%) of all art buyers surveyed said they are likely to buy an NFT in the coming 12 months.
Online art buying habits
- Art buying habits – the change is permanent: In 2020, 51% of art buyers said they thought the changes in how they bought art were here to stay. Fast forward 18 months, and 84% now believe the digital shift in the art market will become permanent.
- Growth rates race into high double-digits: Online art sales rocketed during the pandemic, from 4.8% in 2019 to 64% in 2020. Further strong sales growth of 72% for the first half of 2021 reported by online art sales platforms gave us projected online sales for 2021 of $13.5 billion. As the online art market matures and audiences return to in-person auctions, the growth is likely to normalise.
- Auction houses see strong online growth: Heritage Auctions reported $903 million in online sales in 2021, up 79% from 2020. Phillips saw online-only auction sales grow by 70% last year, while Christie’s posted 41% online-only sales growth in 2021. Sotheby’s online only sales grew 22% in 2021, after phenomenal growth in 2020 (824%). Despite slower growth in 2021, Sotheby’s accounted for a 65.8% share of the online only sales among the three auction houses last year.
- Buyer confidence rising: Over half (53%) of online art buyers surveyed in 2022 said that the pandemic and the art market’s migration online have increased their confidence in buying art and collectibles online, up from 42% in 2020.
- New generation of art buyers: Three in ten (31%) young collectors bought their first ever artwork online, up from 14% in 2020. Nearly half (47%) of new art buyers (those who started buying art less than three years ago) made their first art purchase online, compared to 30% in 2020. The online art market has become an entrance into the art world for new art buyers, many of whom have never ventured into a gallery or auction house.
- New media art sales: Of all of the art buyers surveyed, 41% said they had bought new media art online in 2021, up from 17% in 2020. This corresponds with the rapid ascent of new media art issued as NFTs.
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