In a pandemic, why are collectors splashing out millions on jewellery online?
Despite the current climate, collectible jewellery sales are soaring at online auctions, with collectors having no qualms about purchasing pricy jewels sight unseen.
In April, Sotheby’s put up for bidding a gem-set, diamond and enamel Cartier bracelet. Named Tutti Frutti, the bracelet was created in the 1930s and featured multi-coloured Mughal-cut stones, accented with black enamel.
The Tutti Frutti bracelet was meant to be sold at a live auction, but the coronavirus pandemic and subsequent country lockdowns forced Sotheby’s to change track. Following discussions with the owner, Sotheby’s decided to offer the bracelet in a dedicated single-lot online auction – a pivot that paid off handsomely.
The bracelet sold for a whopping US$1.34 million (S$1.89 million), far surpassing its estimate of US$600,000-US$800,000. Not only is this figure the highest price for any jewel sold in an online auction, it is also the highest price for any jewel sold at auction in 2020 thus far.
With the Tutti Frutti bracelet breaking the million-dollar record, Christie’s is now looking to up the ante. Buoyed by the success of online jewellery sales, the auction house will offer a spectacular D-colour diamond ring, weighing a massive 28.86 carats, at its upcoming Jewels Online sale from June 16 to 30.
With an estimate of US$1 million-US$2 million, the ring will become the highest-valued lot ever offered at a Christie’s online-only sale.
Just like the Tutti Frutti bracelet, the diamond was originally slated for a live auction. “However, having experienced greater client confidence of transacting at higher price points online, the decision was made in collaboration with our consignor to move to an online sale which is a very active channel for us,” a Christie’s spokesperson said.
PRE-PANDEMIC ONLINE SUCCESS
Granted, auction houses were already experiencing a boom in online jewellery sales before the coronavirus pandemic hit. Christie’s has been holding digital jewellery auctions since 2011, when it hosted the inaugural online sale for The Collection of Elizabeth Taylor, which achieved US$9.5 million. “Year-over-year, we have seen an increase in online participation and the value threshold for transacting online,” Christie’s said.
Meanwhile, Sotheby’s has also witnessed considerable online success. Last year, the auction house sold US$250 million worth of fine art and luxury goods online. “Looking at jewellery specifically, 60 per cent of the bids were placed online, and 50 per cent of the buyers placed their winning bids online,” said Wenhao Yu, Deputy Chairman of Jewellery at Sotheby’s Asia.
“Year-over-year, we have seen an increase in online participation and the value threshold for transacting online." – Christie's
DESIRABLE JEWELS ENDURE
Despite this growing success, the sale of the Tutti Frutti bracelet, as well as the upcoming diamond ring auction by Christie’s, is unprecedented, especially considering the current climate. Offering such high value jewellery online is uncharted territory for the auction houses.
Plus, in times of crisis, one would expect collectors to hold off on buying big ticket items, especially without having seen them in real life. Instead, collectors are demonstrating confidence in buying and selling important jewels online, even though in-person inspections are off the cards.
“Desirable jewels, like great art, endures and shines through the most challenging of circumstances,” Yu said.
The results from the auction houses appear to support this. Christie’s Jewels Online sale, held from April 28 to May 8, totalled US$1.38 million, achieving the highest total for a Jewels Online sale in Hong Kong. 89 per cent of lots were sold.
“Desirable jewels, like great art, endures and shines through the most challenging of circumstances." – Wenhao Yu
Meanwhile, Sotheby’s London Fine Jewels Online sale, held from March 31 to April 7, raked in a record US$3.7 million. In Asia, 100 per cent of lots for its Hong Kong Fine Jewels sale, held from April 7 to 15, were sold.
“Online jewellery sales have seen steady growth over the years, but the pandemic has definitely accelerated the process,” said Yu. The coronavirus outbreak meant that sales rooms have gone quiet, leaving the wealthy itching to spend. “With many of the auctions rescheduled or postponed, the market has certainly accumulated some purchasing power.”
"Online jewellery sales have seen steady growth over the years, but the pandemic has definitely accelerated the process.” – Wenhao Yu
“At the same time, for many buyers, it is a very exciting experience to buy and compete for a high value item online against anonymous bidders. The excitement and the convenience together makes participating in online jewellery auctions a tempting experience, at a time of social distancing.”
Client trust, as well as advanced technology, have also allowed digital sales to thrive. “Many of our clients purchase sight unseen. Our specialists have built meaningful relationships with our clients, thereby they trust in the pieces that we offer for sale, so many can comfortably transact without seeing pieces in person,” Christie’s said.
“Technology has played a large part as well, as photo quality has risen and capabilities such as a 3D-viewing or video have enhanced how objects can be viewed virtually.”
ATTRACTING NEW COLLECTORS
While traditional live auctions are expected to roar back to life post-pandemic, online auctions have nonetheless proven their own merits. For one, taking their lots online has allowed auction houses to attract new clients, who hail from all over the world.
Data from Sotheby’s April Hong Kong Fine Jewels sale indicated that 30 per cent of buyers were new to the auction house. The sale saw the participation of clients from over 40 countries, “with bidding coming in around the clock,” Yu said.
Similarly, Christie’s April Jewels Online sale saw the participation of clients from over 31 countries, with 38.5 per cent of them being new buyers.
Online sales have also garnered the interest of a new generation of younger collectors. For Sotheby’s four online sales conducted since the beginning of March, 30 per cent of the bidders were aged 40 or less.
“Online auctions are relatively easier to participate in as they are not bounded by physical locations and time zones. In addition, online auctions offer an eclectic mix of jewellery in a broad price range, some with no reserve, which also helps to attract first-time buyers,” Yu explained.
While Christie’s did not disclose specific data for its jewellery sales, the auction house said that 44 per cent of buyers across all of its online sales were under the age of 45.
Wealthy collectors may be splurging on jewellery online, but Yu hesitated to label this an act of revenge spending. “Perhaps it is not so much an act of ‘revenge spending’, but more of a ‘discovery’ or ‘exploratory spending’,” he said.
“We made an effort to bring in a broad range of jewellery in our online sales, and our clients took pleasure in discovering anything from trendy signed pieces, classic designs, to period jewels. The online sales are a testament to the broadening taste of a new generation of buyers.”
Sotheby’s Tutti Frutti Cartier bracelet may have broken the million-dollar record for the year, but it remains to be seen if Christie’s 28.86 carat diamond will hit the two million dollar mark come June. If so, the fervour for buying jewellery online will truly reach fever pitch.