Art is becoming a significant expense for younger Asian generations.

• According to Nicolas Chow, Sotheby's chairman for Asia, there is a growing trend among younger people in Asia purchasing art.
• Globally, millennials and Gen X collectors prefer buying at auction rather than purchasing from dealers.
• The popularity of digital art, including AI-generated works, is increasing, according to Angelle Siyang-Le, director of the Art Basel fair in Hong Kong.

According to a longtime collector and senior auction house executive, wealthy shoppers in Asia are increasingly spending their money on art.

Sotheby's chairman for Asia, Nicolas Chow, stated that over 40% of the platform's buyers of contemporary art are millennials (born between 1981 and 1996), while Gen X (1965 to 1980) are also likely to be significant spenders, according to him.

"In 2023, Gen X will be the most significant buying base, with over a million dollars in spending power, according to Chow on CNBC's "Art of Appreciation.""

The youngest age group of buyers, Gen Z, is "coming in quite strongly," as stated by him. He also mentioned seeing a 20-year-old buyer purchase a piece in Shanghai to commemorate his graduation.

During the first half of 2023, wealthy millennials in Asia spent a median of $59,785 on art and antiques, while Gen Zers spent $56,000, according to the Art Basel & UBS Survey of Global Collecting 2023.

According to a survey, buying at auction is popular among millennials and Gen X collectors worldwide. This trend is also evident in Asia, as seen at Christie's Hong Kong spring season auction, where around 25% of buyers were new to the auction house and 43% of those were millennials.

Despite a 4% decline in the global art market to $65 billion in 2023, sales in China increased by 9%, surpassing the U.K. as the world's second-largest art market. The surge in activity was driven by post-lockdown buyers purchasing backlogged auction inventories and the return of full-scale programming at major fairs and exhibitions in Hong Kong, as reported by Clare McAndrew, author and founder of Arts Economics.

The increase in younger buyers at Sotheby's is partly due to an increase in online activity. Chow explained that during the pandemic, the company developed its digital abilities through live streaming, which allowed them to bring art to a wider audience and engage with buyers globally.

According to the Survey of Global Collecting 2023, younger collectors, particularly Gen Z, are more interested in newer art forms and spend the highest average amount on digital art and prints globally.

Young digital artists

Artists who specialize in digital media are gaining more recognition, as the definition of digital art has evolved beyond just photography to include video art, NFTs, and AI-generated art, according to Angelle Siyang-Le, director of the Art Basel fair in Hong Kong. She shared this information with CNBC's "Art of Appreciation." An NFT, or non-fungible token, is a unique digital asset stored on the blockchain. In 2023, sales of art-related NFTs reached $1.2 billion, though this was less than the $2.9 billion peak in 2021. Despite this, sales were still significantly higher than in 2020, when they were just $20 million, according to the Art Market Report 2024.

Digital artists will increasingly receive more attention as the younger generations become more prominent in the market, according to Siyang-Le.

Mak2, a Hong Kong-based artist, employs various mediums in her work, including Instagram videos. In her 2017 piece "You Better Watch Out," she created an inflatable, transparent "snow globe" featuring floating QR codes that the audience could scan. CCTV cameras recorded people scanning the codes, which linked to a web page displaying the audience viewing the artwork.

"You are being watched as you watch yourself being watched," Mak2 stated in an interview with CNBC's Art of Appreciation. "You're not just using your phone, you're becoming data circulating inside the app and being recorded and analyzed," she emphasized.

In March, Mak2 showcased at Art Basel Hong Kong with an installation titled "Copy of Copy of Copy of Copy," which was inspired by the video game The Sims and created by artists she hired through an online marketplace.

In the past decade, Sotheby's has expanded its focus to include contemporary and modern art, according to Chow. "Fifty years ago, when we first arrived in Asia, we primarily focused on Chinese art. However, today, we have broadened our market to encompass a wide range of new experiences and materials, from dinosaurs to cars to contemporary art, sourced from all corners of the globe. We now offer NFTs, sneakers, and other unique items," Chow stated.

The Hong Kong Art Gallery Association experienced a 27% increase in member galleries from 2021 to 2023, and two contemporary museums, the Hong Kong Palace Museum and M+, were established in 2022 and 2021, respectively. These museums have contributed to a "greater interest" in the art community in Asia, according to Chow.

Sotheby's has been conducting auctions in Asia since 1973 and will open a flagship "maison" in Hong Kong in July, where they will sell items for immediate purchase as well as hold regular auctions. "At our maison, we'll be showcasing a wide range of items from Sotheby's collection, from ancient artifacts to cutting-edge technology," Chow stated.

— CNBC's Quek Jie Ann contributed to this report.

Watch The Art of Appreciation on CNBC International