Is the future of auction houses online?

By Nickky Faustine P. de Guzman, Reporter
WE’VE BEEN REDUCING our activities to the comforts of our small screens: shopping, dating, banking, studying, even attending funerals and masses. The same goes for art viewing and buying, as in the introduction of purely online auctions in the Philippines that started two years ago. Despite its convenience, the questions begs to be asked: How does technology disrupt the dynamics of traditional auctions?
Live auctions are where the action is. Here, bidders have their own paddle boards bearing different numbers, which they have raise to outbid each other for a coveted Jose Rizal sculpture, a Ronald Ventura piece, or one of Fernando Amorsolo’s iconic rural landscapes. Every successful bid for an art piece ends with a literal “bang” as the auctioneer hits the gavel to a block, and the winner — obviously the one with the most money to spare — takes home a piece of art.
But a totally different atmosphere, one that is silent and spiritless, happens on the web. The thrill of raising a paddle board to mean you want to bid, the chase for an item, the feeling of outbidding a competitor, and even the shame of having to withdraw from the ongoing war because shelling two million for a wooden chair is too much, these, and more, are all absent in purely online auctions. In online auctions, it’s just you and your computer.
“Anybody can do online auction, it is the convenient way to bid, but of course, there is still the traditional manner. I like the thrill of the live auction, the sizzle of the moment. I still prefer it,” Leon Gallery owner, Jaime Ponce de Leon, told BusinessWorld on May 10 at the sidelines of a media conference for the launch of latest live auction, which happened on June 9. “But then again,” he continued, “online is also very good.”
Leon Gallery, one of the few auction houses in the country, started the art of virtual auction in Manila, holding its first ever online-only auction on July 30, 2016. The gallery now does both live and purely online auctions. Mr. de Leon said it is a trend abroad, pioneered by international industry dominants Sotheby’s and Christie’s, Inc., because more and more people find it hard to physically come and participate in face-to-face public sales.
“While online auctions have wider reach, they are more for the minor lots, or the ones that can be done via online. Like the same way it happens in Christie’s, Sotheby’s, and other international auction houses, the minor pieces, like jewelry, are done online. Live auctions, meanwhile, are concentrated on the bigger lots, the pieces that collectors would intentionally come, see the auction, and bid for themselves,” said Mr. De Leon.

Besides jewelry pieces, minor lots may include furniture and small paintings. But regardless of the medium, interested buyers are encouraged to go visit a gallery few days before the auction date to see and scrutinize in person the items that are up for grabs. Others can also check the e-catalogues available on the websites.
Through Leon Exchange, the online website for Leon Gallery’s online auctions, anyone can participate in the gallery’s virtual public sales. Participants must log on to www.leonexchange.com’s website to register and bid. All information for a specific lot are given on the website including the name of the lot, lot number, opening bid, the number of bids placed, current bid, remaining time until the auction ends, starting and ending dates for bidding, picture or pictures of a lot, user name, and description of the lot. International websites, like Sotheby’s (www.sothebys.com), have the same procedure, and also remind online bidders to refresh the page to update the details. Participants receive e-mail whether they have to bid higher, or they have won or lost in the virtual art war.
Save for Leon Gallery, the other houses in the country, Casa de Memoria, Salcedo Auctions, and its subsidiary, Gavel and Block, however, do not do purely online auctions just yet. They have absentee, online, and phone biddings, instead, for people who cannot go join the live action. The three agreed they all need to establish their names and credibility first, and for the greater public to understand how auctions work, before they even go purely online.
“We are planning to roll out our online auctions soon. In the next year, we are planning to put more emphasis on our online presence so we can attract a larger pool of clients. Although because of our auction house being a new auction house we would like to build our brand and clientele in the traditional manner first,” Casa de Memoria’s marketing manager, Camille Lhuillier, told BusinessWorld via e-mail.
Started in 2016, Casa de Memoria is the youngest of the three main auction houses in the Philippines. It specializes in antiques and heirloom pieces for homes. Meanwhile, both Leon Gallery and Salcedo Auctions started in 2010, while the latter’s subsidiary, Gavel & Block, was launched only last year.
Meanwhile, Salcedo Auctions said it is busy cementing its credibility. “Salcedo Auctions and its subsidiary Gavel & Block, as the pioneers of the Philippine fine art auction industry, seeks to first build the public’s understanding of how the auction process is supposed to be conducted, and at same time, build the public’s trust and confidence in this venue and methodology for selling and buying valuable collectibles. We have a duty to uphold and set standards, and so while we embrace technology, we also wish to balance it with responsibility, objectivity, and discernment,” said Salcedo Auctions owner Richie Lerma in an e-mail interview.

Salcedo Auctions, on its website, says it is “The only auction house in the Philippines specializing in fine art and design, furniture, decor, jewelry,timepieces, valuable books, maps, numismatics, ephemera, and rare automobiles.” Leon Gallery, meanwhile, boasts on it site that “it is primarily known as the leading gallery specializing in historically important and museum-quality Philippine art. Old Master paintings such as those done by Juan Luna, Felix Resurreccion Hidalgo, Fabian de la Rosa, and Fernando Amorsolo lie at the core of Leon Gallery’s collection.” The gallery also sells Philippine antiques, heirlooms, and estate pieces.
There are also other reasons why Salcedo Auctions and its subsidiary Gavel & Block has not yet started its own online-only auction.
Mr. Lerma said: “In an unregulated auction market such as the Philippines where certain galleries purport to do auctions when what all these outfits are really doing is just trying to move inventory in the guise of auctions, and where there are no systems in place to verify the existence of bidders and sales, the move to doing only purely-online auctions at this stage in our view is premature as it adds another layer — the cloak of technology — that has the potential of further obfuscating the market.”
Another disadvantage of online-only auction is the inability to see the other person you’re bidding against. “What if it’s a computer or just a member of gallery staff on the other end of the line bidding against you to push the price up?” said Mr. Lerma, while adding, “Of course, in a live auction, you also don’t really know who’s on the other end of the phone, and where those absentee bids are coming from, but there are certainly more safeguards in place, and cues from an event that it is held live in front of potentially millions of viewers that gives that extra assurance to prospective bidders.”
As for Mr. De Leon, he said such line of thinking could only be thought by those who intend to cheat.
Personal live bidding, at the end of the day, is still king. “Online auctions are indeed part of the ways by which auctions can gain new markets and greater reach, but there is still absolutely nothing that compares to seeing the pieces going under the gavel and block in person, and bidding on the pieces live, where one can feel the atmosphere in the sale room, gauge the competition, and see whether or not there is real interest in a piece,” said Mr. Lerma.

Although, on the upside, online auctions are cheaper to put up, saving houses from hiring auctioneers and setting up for a few cocktails and snacks. Also, despite some upsides of the Internet meddling with art appreciation and art buying, as in the option to zoom the screen and the convenience of a reliable 4G wherever you are, all auction houses agree that the traditional auction is the best medium to see and seize art. “It’s still a tradition where serious collectors like to bid on their own pieces and have a good time. I think that, sometimes, having a solely online experience of an auction takes away from the inherent spirit of what an auction is,” said Ms. Lhuillier.
While majority of the auction houses in the country are not jumping into the purely technology-mediated business just yet, all of them are utilizing the power of social media to gain more bidders and enthusiasts.
Salcedo Auctions started the use of Facebook Live and Instagram Live, where audiences from whenever could watch in real time how live auctions take action. Its Twitter, meanwhile, has not been updated since 2015.
“Our pioneering Facebook and Instagram Live for all of our auctions is about upholding the integrity of the auction process — keeping our auctions open and transparent as the trusted name in Philippine auctions,” Mr. Lerma said. “Viewers can actually see live what transpires on the block — the bids that are fielded from the floor, from the phone, and via absentee and online bids; what sells and what doesn’t. We are proud to announce what record prices we are able to achieve, but we are also not shy to show what does not sell, because that is what a real market and a real auction is all about. It is, after all, a public event, open to all to see, understand, analyze, dissect, discuss, and appreciate.”
While Leon Gallery and Casa de Memoria have not jumped in on live streaming, they also use their Facebook and Instagram pages and Stories to promote their events and share their activities. Casa has no Twitter page while Leon has just set up its own in May.
While technology provides opportunities for our industries to grow, some businesses will have to remain basic and traditional at its core.
“I think that technology is part of the future of auction houses, but I don’t believe that one day, all auctions will be online,” said Ms. Lhuillier. “A big part of the art market and the art world is how the collectors interact with each other and how collectors and buyers like to get into the spirit of a live auction and take part in all of the action.”