The following Q&A appeared in Art+Auction’s August issue, which profiles the world’s top auction houses of 2016. ARTINFO will be publishing the articles from this issue over the next few days. Click here to see related stories from the issue. To find all our coverage of the 250 Best Auction Houses Worldwide, as well as ARTINFO’s top picks for the best in visual arts, architecture and design, performing arts, lifestyle, and culture and travel, visit our Top Lists page at blouinartinfo.com/toplists.AUCTIONATA & PADDLE8Headquarters: Berlin & New YorkAlexander ZackeCEO & Cofounder of AuctionataAlexander GilkesChairman, cofounder, and CIO of Paddle8 and AuctionataIn 2011, Alexander Gilkes cofounded the New York online auction house Paddle8 with partners Aditya Julka and Osman Khan. The following year, Alexander Zacke launched Auctionata, a Berlin-based online enterprise, with his wife, Susanne, and Georg Untersalmberger. In May of this year, Gilkes and Zacke announced they had joined forces to become a major player in the auction house industry, with Zacke serving as chief executive officer of the merged entity and Gilkes as chief innovation officer.Tell us about the new partnership and how it will give you an edge in a traditionally competitive industry.Zacke: Partnerships will be the key to success in our very competitive and increasingly global and digital business. Almost every company will eventually come to a point when joining forces with a partner will enable it to operate, innovate, and expand at a much lower cost than it could on its own. The market participants who accept this reality and find and maintain the right partnerships will have a much better chance of growing than those who try to serve their market on their own. I strongly believe that this will also apply to the online auction industry. Auctionata and Paddle8 have brought together two very complementary firms in terms of categories, sales formats, and geographies. Consequently, we are dedicated to growing our business, and the global midmarket as a whole, by offering our 800,000 users the most immersive and innovative online collecting experience. The merger will certainly have an influence on the market dynamics and the competition among its players. Our joint effort will be centered on innovations and the development of new technologies, products, and sales formats. At the same time, we will also focus on finding the best organizational architecture. Over the course of the next 12 months, we plan to explore and discuss several options, while both companies continue individually under their original brand names. However, our operations in New York have already been integrated, as have Auctionata’s in the U.K. (including ValueMyStuff) and Paddle8’s European operations in London.How has the recent rise of auction aggregators changed the online sales landscape?Gilkes: Auction aggregators have enabled collectors to comfortably purchase from a variety of sources and auctioneers to increase their reach without large investments in technology. Online sales have increased due to the improved accessibility, and the aggregators have become very popular among investors as well as collectors. However, the sustainability of the aggregators’ revenue and business models is yet to be confirmed. Moreover, I expect to see consolidation in that field within the next couple of years.With the globalization of the auction industry, have Auctionata and Paddle8 developed specific strategies for different countries or regions in terms of staging sales and gathering consignments?Zacke: Yes, we adapt our services to a certain extent. In terms of consignment, we offer a personalized service through our local representatives. So although we centralize many of our operations for the sake of efficiency, we still reach out to consignors to tailor our services to their needs. The same applies to our sales. While our live-streaming auction concept is generally designed for a global audience, we broadcast particular live-stream auctions at times when the interested target group is most active. We adapt the design, the language, and the content of the sale to the preferences of the respective audience.Gilkes: At Paddle8, we have become increasingly mindful of the need to localize our auctions to the language and timing of key target geographies, such as China. That said, our benefit auctions will, for the most part, conclude with a live event in the host country, thus enabling the local collecting demographic to participate in the auction in the concluding hours. The benefit auctions have allowed Paddle8 to build a global awareness and collector base.How is your online market and clientele evolving?Zacke: Auctionata has seen an increasing interest in vintage luxury goods from collectors in China. While their demand for Asian art persists, they have also become more interested in collecting watches, jewelry, vintage fashion, and wine.Gilkes: Furthermore, and as has been witnessed by Paddle8, there is a new generation of collectors clamoring for access to art, design, and collectibles. The most active online buyers tend to be those with geographic separation from great sources of art and design. Some of our most active collectors are based in the Middle East, the Caribbean, and the more remote regions in the United States.
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