China Guardian, Beijing Poly New To Hong Kong’s Established Auction Scene
Having expanded into the city last year in the hopes of tapping regional demand while gaining cred (and hopefully market share), mainland Chinese auction houses are hoping to compete with international rivals like Sotheby’s and Christie’s by targeting the most sensitive place for regional collectors: their pocketbooks. While leading Chinese players China Guardian and Beijing Poly are hardly hurting for business in Hong Kong — Zhang Daqian’s “Cottages in Misty Mountains” sold for US$3.5 million at a China Guardian sale there on Thursday — as they apparently see it, their competitive advantage lies not in offering the best or most diversified lots, but lower costs for buyers.
As the Wall Street Journal notes:
Poly Auction and China Guardian, the country’s top two auction houses, are charging a 15% buyer’s premium—an additional fee paid by the winning bidder for an item—on all items. Meanwhile, Tiancheng International charges 18%.
To compare, Sotheby’s charges 25% on items up to 400,000 Hong Kong dollars (US$51,000), 20% between HK$400,000 and HK$8 million (US$1 million), and 12% for items over HK$8 million.
All four auction houses said the commission it charges sellers is around 10%, though that figure is often negotiable.
Though Sotheby’s denies the buyer’s premium policies of Chinese auction houses in Hong Kong will bring about a price war, clearly what China Guardian and Beijing Poly are doing to drum up business will affect the dynamics of the market in some way. Now that Christie’s and Sotheby’s are hoping to attract mainland China’s more discriminating buyers to open their wallets, the pressure may be on to these global players to make some adjustments, however begrudgingly.