A pandemic-driven boom in online sales of collectibles sent the global collectibles market to a record high in 2020. The market is expected to sustain the momentum through the coming years with new trends positively impacting its trajectory.
According to the research data analyzed and published by MejoresApuestas.com, the global collectibles market was estimated to be worth $372 billion in 2020. At the time, it had a total addressable market of $440 billion, underlining its potential for growth.
It is expected to grow at a compound annual growth rate (CAGR) of 7% between 2021 and 2028. By the end of the forecast period, its value is set to reach $522 billion.
One of the factors driving the market’s growth in recent years is the shift to online sales and the emergence of eCommerce sites. The asset class is more accessible than ever and online sales have expanded the market globally.
According to ArtsEconomics.com, the total online sales of art and antiques worldwide has grown from $3.1 billion in 2013 to $12.4 billion in 2020. Though the growth rate is expected to slow down in 2021, the online antique market will still be worth more than $10 billion by the end of the year.
Private Collectors’ Holdings Rose to $1.2 Trillion During the Pandemic
According to Credit Suisse, before the pandemic, private collectors were estimated to hold items worth $1 trillion. The figure is estimated to have increased to $1.2 trillion post-pandemic, thanks in part to the shift to online sales.
In the past, much of the sales volume of collectibles came from physical auctions at legacy auction houses. However, in 2020 due to the pandemic, physical auction sales fell by between 40% and 60%.
In 2021, auction houses responded by digitizing the process. At Sotheby’s, for example, 70% of auctions in 2021 took place online.
Digital access has also opened up the space to new demographics and income levels. Per estimates from auction houses, 40% of online buyers are new to the market. The majority of the first-time buyers are also younger than the average typical collector.
There has also been a noteworthy acceleration of disposable income, allowing enthusiasts to spend more on collectors’ items.
In 2020, the best-performing category was that of luxury handbags. According to Knight Franks’s luxury investment index, they had a return of 17%.
Fine wines also performed exceptionally well, gaining 13%, while classic cars appreciated by 6%. Rare watches were up by 5% while furniture rose by 4%. On the other hand, rare whisky, which has appreciated nearly 500% over the past 10 years, dropped by 4% in 2020.
Alternative Asset Market to Grow to $14 Trillion by 2023, 59% Higher than 2021 Value
One new trend is expected to have a considerable positive effect on the collectibles market, driving further growth in coming years. More and more people are now collecting intending to make an investment.
The shift comes at a time when financial advisors are recommending that investors allocate 5% to 10% of their portfolio to the asset class. Not only is it a form of diversification, but it also acts as a safe haven. Moreover, it comes with the added benefit of capital appreciation.
During the period between 2005 and 2019, collectible classic cars were the top performers in the segment. Their returns in that duration were 246%, followed by rare coins at 230%.
Fine wine ranked third with 199% while classic watches had a relatively modest 126% gain. However, coutts, carpets and rugs had a 20% decline in the same period.
Alternative assets such as collectibles are hot commodities and are expected to remain so in the foreseeable future. Analysts project that the industry’s overall value will be a stunning $14 trillion by 2023. Compared to its valuation in 2021, that will translate to a 59% increase. Some people choose to gamble online while enjoying some codigo del bonus bet365 betting credit.
The introduction of blockchain technology has proved to be a watershed moment for plenty of industries, including collectibles. In 2021, digital art collectibles in form of non-fungible tokens are among its hottest inventions.
During the first three months of the year, the market pulled in more than $2 billion, a 2,100% increase over Q4 2020. According to estimates from Dapp Radar, NFT sales in July 2021 alone totaled $1.2 billion, more than half the cumulative sales of the entire H1 2021.
Evidently, technological advancements like eCommerce and blockchain have made collecting easier than ever. With lower barrier entries, easier accessibility and greater interest from investors, the future seems bright for the asset class.