As technology progresses, art sellers and collectors are turning to new ways of art trade. Auction houses lose their monopoly and online art dealers are not a novelty. From Beijing’s Hihey.com to New York-based Artspace there are more than a few websites that allow its users to buy and sell a variety of works online. But one company in Hong Kong has a different approach. By using a method similar to the stock exchange on its sales platform, Takung Art Company gives people an opportunity to invest into a work of art and gain part ownership of the artwork of their choosing. These investments are long term and the part owners won’t get their share of the pieces’ value till ten years trade period has expired and the artworks finally get sold.
Shared Ownership – How Does it Work?
Takung Art Company Ltd is the first business in the world that provides an option of shared ownership to buyers and investors. In order to list your artwork for sale, you need to get certain ownership documents and take the actual artwork to one of Takung’s storage facilities. After that it’s all up to Takung and the company will ensure the artworks from any possible damage, obtain the official evaluation from an independent art expert and organize the necessary promotional activities to make sure that the price goes as high as possible. Currently, there are 59 artworks listed for sale at company’s website most of which are made by Chinese contemporary artists. Takung Art treats art pieces as a normal company except stocks and shares are now turned into what they call a unit. The online trade platform divides an artwork into units depending on its accessed value. One unit usually costs 1 Hong Kong dollar and an artwork can be divided into millions and millions of units that reflect its value. For example, an artwork whose value is assessed at 1 million HK$ will be divided to one million units. Takung Art company than trades these units, whose price changes depending on the demand. After a 10- year period, the artworks will be sold and the proceeds divided between the owners. The founder of the Takung company said that there are several ways to sell the artworks including “auction house, galleries and a 1-to-1 transaction platform that the Takung company is currently developing”. The company exist from 2013 wich means that the first sale of the artwork is scheduled to take place in 2023.
Art as an Investment
The reason why the company is successful is because it speaks to people who see art as any other investment. People who want to acquire an individual artwork and keep it in their house or a safe or gallery have very little use of this platform whatsoever because its investors don’t actually own an individual piece but only a digital unit that will convert to money once the artwork is sold. If the collectors want to buy and own an actual piece they will have to do it the old fashion way (at least, until Takung Art Company Ltd platform is finished). On the other hand, the platform can be quite useful for the other side in the process- everyone that are looking to sell the artwork because Takung Art Company does most of the work for them.
The Future of the Innovative Investment Model
For now, this model seems to be working and the company announced that the prices of pieces that are listed for sale have risen over whopping 700 % in just two years since they were founded. And though the rise in value is fascinating, many predict that the model won’t work in the long run. According to Reuters, Philip Hoffman, chief executive of the Fine Art Fund Group in London, believes that the model won’t work because “a lot of these people (using the online platform) simply have the financial approach with no art understanding whatsoever,”. And that’s a possible recipe for a disaster because as with any other investment if the pieces get sold for a smaller sum than expected the users may not be able to get their money back. Takung Art Company relies on the statistic and promises its users that their investments are safe with them and in a way they are right. They are as safe as any other investment out there -no more and no less.
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