Christie's CEO talks move to ChinaApril 10, 2013: 11:59 AM ET
Steven Murphy on the art house's latest location, the Internet's impact on fine art auctions, and his favorite pieces.
FORTUNE -- For any global CEO looking to the future, two main objectives are coping with the increasingly digital world and expanding into growing markets, namely China. Steven Murphy, the CEO of art auction house Christie's announced that the 247-year-old company will open the first independently operated fine-art auction house in the world's most populated country. Christie's will hold its first China-based auction this fall in Shanghai.
Since Murphy took the CEO gig in 2010, China has taken up a tremendous amount of his brain space. So has the Internet, which Murphy believes could breathe new life into old auction houses. In this exclusive interview, he talks to Fortune about the impact of accessing one of the world's biggest art markets and how phone calls from Christie's warehouse workers make his job awesome.
Fortune: Christie's in China seems like big news, but what does it mean?
Steven Murphy: It's a huge change. The Internet is the best thing to happen to auctions since the telephone. Our opening a proper Christie's edifice in China is the most important thing to happen for our expansion since our arrival in NYC in 1970.
Okay, there's a lot there. I'm going to start with China. What is the most compelling data about this market?
Well, for one, it's grown to become about 25% of the global art market, which puts it just behind the U.S., and that growth happened in less than 10 years. So that's pretty extraordinary. Two, I believe that like everything else that happens in China, any trend is like a trend in America or Europe, but you have to add a couple of zeros to the impact.
What art auction trends are you watching?
There has been a huge cultural drive to experience the emotional content of owning and living with art, combined with the facility online. The Internet is making the knowledge of what's available accessible, instantly, around the world, in HD imagery. If you're sitting in Shanghai, you'll now be able to take a taxi to our offices and see the works in person. If you're sitting in Los Angeles, you'll see them on our iPad app at the same moment. That's why there's been so much of a surge in buying interest.
Does that mean that art auction houses of the future will need brick-and-mortar expertise combined with online capabilities?
I believe it's a condition that already exists. It's a matter of building the capability fast enough, not a matter of whether it's a good idea. That doesn't mean that we're not doing live auctions, but 30% of our bids in the auction business came online.
If online is growing so much, why was it imperative to build a physical space in China?
You know, we have access to Chinese mainland clients now, but there's nothing that replaces being in-person and having an edifice that represents Christie's -- not just the brand, but the people and the expertise.
You joined the company about three years ago. Was getting into China on your to-do list from day one?
Yeah. Like every other new guy in a new job, I had a list of five key objectives, and three of them were number one. So depending upon the afternoon, working with a team to come up with the right plan for respectful and proper presence in mainland China was number one.
What kind of administrative support did you need to get there?
Well, I've been blessed with owners that, from day one, have encouraged all of us at Christie's to take risks that put the client and the art first and grow the business. As you know well, I'm sure, expanding in China is exciting but does not come at small capital cost. Likewise, if we're doing 50 online auctions this year, there's been quite a heavy effort and investment behind the curtain to build an e-commerce platform to satisfy the growth.
Is it easier to get those kinds of long-term investments at a private company rather than a public one?
It depends. It's great to be in a private company as long as you have an enlightened ownership, and that we do.
Enlightened ownership must be nice. Your job sounds fun. Do you have a favorite piece of art?
It's a really hard question to answer -- though it's the coolest part of my job -- because it changes every few days. Since I was a very young lad, I've been a fan of John Singer Sargent. So to have a specialist from the American Pictures department say, "We have a Sargent portrait downstairs, come see it," and to be able to hold it in my hand was pretty exciting.
Also, my third day at Christie's, one of the gentlemen who works in the warehouse, who I've gotten to know, calls me and says, "Steve! We've got a Roman helmet, come downstairs and put it on your head!"
That's the best part of the job. It's really about appreciating the beauty and the range of all these things that were crafted by the hand of man.