Blogs

Diving deeper into the global art industry – from dominance of the US, UK and China to the emerging new trends


  • Overview of the global art industry
  • Dominance of the US, UK and China in the art industry by the numbers
  • Emerging new trends in the industry and the road ahead

 

The global art industry which consists of a set of diverse strata of paintings, sculpture, art prints and also antique in multi forms grew by 5.8% to an estimated $67.4 billion in 2018, making it the second biggest year for the global art market over the past decade, with only 2014 accounting for a higher sales value at $68.2 billion. The growth in the industry were driven by the sales in the top end of the market. Purchases in the ultra-expensive artwork soared. Art dealers in the lower brackets, with annual turnover between $250,000 and below and $250,000 to $500,000, saw their sales decline by 18% and 4%, respectively, while the dealers in the higher brackets of $10 million to $50 million and $50 million++, saw their sales increase by 17% and 7%, respectively. The industry marked decent growth in 2018 and the year before after two back-to-back years of decline in 2015 and 2016 respectively. The uneven trend in growth and mercurial movement in sales in different segments of the industry is a result of the uncertainty about the global macro-economic environment and the fundamental change in the traditional business model of the art industry (as highlighted in the report The Art Market 2019, released by Art Basel and UBS).

The three largest markets for the industry (US, UK and China) took lion share of the global art market, collectively accounting for approximately 84% of the global sales value, up 4% from 2017. The US market held the pole position again in 2018, accounting for 44% of the global art market sales (highest level to date), followed by the UK at 21% and China at 19%. While the share increased for the US and the UK by 2% and 1% respectively, the share for China fell by 1% in 2018. This downfall in China was due to Chinese collectors sidelining during the country’s drawn-out negotiations with the US to avoid a trade war, also there was a contraction in the supply of high-quality works during this period. As per experts this behavior that the Chinese art market is experiencing is similar to that of the broader economy, as opposed to being immune to the downturns in previous cycles.

Dealers and gallery sales dominated the sales in 2018 reaching an estimated sale of $35.9 billion, increasing by 7% from 2017. This was followed by auctions which registered a sale of $29.1 billion, increasing by 3% from 2017, where Christie’s and Sotheby’s accounted for more than 40% of the auction sales value. The five prominent art houses – Christie’s, Sotheby’s, Ply Auction, Phillips and China Guardian, made up for more than 50% of the global auction sales value in 2018. While dealers and auction sales still dominate the art industry despite the recent slowdown, new avenues like the online sales and the emergence of millennial buyers are shaping the industry as well. Online sales continued to grow in 2018 by ~9.8%, totaling to $4.64 billion, however, the growth was a little lower than recorded in 2017 when it registered a 12% increase in sales. This slowdown in growth has been a trend since the past few years for the online art market. There are many reasons for this declining trend: from lack of transparency especially in terms of the pricing, reluctancy of transactions for a huge amount for an art which has not been physical examined, fear of fake and forgeries, but most importantly establishing trust by sellers selling has been the biggest issue for the online art market space. Whilst there has been some bottleneck with the transition of the art industry from offline to online, experts and their studies are still giving a positive review for the future of the online art market, expecting a consolidation with a few trusted names dominating this space.

As per survey conducted by UBS and Art Basel, millennials (individuals aged between 22 and 37 years) are the new breed of art buyers who are buying art more actively and frequently. Millennials made up approximately half of the art buyers who on a regular basis spent over $1 million on an artwork over the past two years. As per the study, between 2016 and 2018, 93% of the millennials purchased art online, spending an average of $106,930, while the generation X (aged between 38 and 52 years) spend an average of about $500,000 online, but with less frequency. With the increasing participation of millennials in the overall sales, their spending habit of making purchases online could provide a significant possibility for the online sales of art to catch up in the years to come.

Separately, another trend gradually gaining traction is the association between the art world and the blockchain ecosystem which was noticed at many instances during 2018 sales. In July of 2018, Maecenas, a blockchain platform partnered with an art gallery in London to offer to sell a fraction of the stake for an Andy Warhol’s 1980, 14 Small Electric Chairs in cryptocurrencies. Another major transaction was the $318 million sale of the Barney A. Ebsworth collection by Christie’s New York, which was done entirely through blockchain. The initial foundations for future, in terms of synergy between the art world and the adoption of blockchain, has been laid and looks promising.

The endgame for the global art industry is still open and the industry is divided on how it will evolve with the new set of art buyers in the form of millennials and also on how the online art market will develop in the next few years. However, the need of the hour for the global art industry to sustain is to cultivate and reach out to new regional smaller markets via new models and platforms to get fresh buyers and increase their buyer pool.

Your Rating

Slack set out to kill E-mail

Started as a side project for internal use in a gaming company High revenue growth with recurring revenues Went Public by offering shares through the Direct Public Offering ...

Will the Big Bang merger drive, of Indian Public Sector banks, provide the required impetus to the slowing economy?

India’s Government announces plans to merge 10 of the country’s public sector banks Probable impact of the mergers   India’s Finance Minister, Nirmala Sitharaman,...

Is Mothercare on the verge of collapse?

History of Mothercare What went wrong? Company moved into administration   Mothercare, an iconic brand for babies, children and parents to be, went into...

Rapidly growing Indian online food delivery industry and its unrealised profits

Evolution of online food delivery industry in India Geographical penetration and scope for expansion Key players and their zeal to balance revenue and costs   Online...

An analysis of Malaysian rubber glove industry

How big is the international rubber gloves market? Reasons behind the healthy and steady growth Malaysia’s role in the industry Why are companies struggling for stable...

Tire manufacturing industry, analysing the cost and margin trends

The global market for tire manufacturing stands at $180 billion. Michelin anticipates the long-term demand to rise at the rate of 5 to 10% a year in developing markets and 1 to 2% a year in mature...

Failure of Amazon in China, an analysis

E-commerce market in China Online consumer product retailers in China Performance of Amazon in China   Amazon is a global e-commerce player selling a wide...

Can lithium-ion anode demand for needle coke reduce availability for electrode players?

What is needle coke? Uses of needle coke Lithium-ion battery manufacturers demand needle coke   Needle coke? Needle coke is a specialised form of petroleum coke...

Indian wood panel industry, growth drivers and present trends

Current market scenario in the Indian plywood industry Growth in the housing sector and rapid urbanisation to provide the boost GST rationalization to reduce price difference...

Housing finance market in India. Is affordable housing driving the growth?

Overview of the housing finance sector in India Key players dominating the segment and their dynamics Factors driving aggressive demand for housing   The housing...

Carbon black industry, strong potential for supernormal profitability?

What is carbon black? Its uses Impact of the environmental curbs in China   What is carbon black? Carbon black is a fine carbon powder and it is a disorderly...

Is the radio broadcasting industry in the U.S. dying? An analysis

Radio, the most powerful medium of reach in the U.S. Why the industry is moving at a slow pace? Radio’s health is still sound, will it continue in the long-term?   ...

Malaysian rubber glove industry, an update

Rising global demand for gloves Impact of USP 800’s implementation and the US-China trade war on Malaysia’s rubber gloves industry Key challenges for the Malaysian rubber...

Rice industry outlook 2018

Major rice producers and consumers Global rice trade Factors dominating the trade   Rice is the 3 rd largest produced agricultural commodity in the world, after...

Blockchain, an emerging concept, a disruptive technology (Part 1)

What is blockchain? How is blockchain revolutionary? Cryptocurrency, the new money ICOs, the new way of raising money Summary Blockchain is a software architecture...

Rise of Ant Financial, will the success story continue?

What is Ant Financial? Journey to become king of unicorn Will regulatory curbs hinder its success journey?    Ant Financial, an affiliate and integral part...

Sri Lankan economic and political crisis

Sri Lanka’s latest political crisis, who governs the nation? Poor economic indicators adding to the nation’s woes   Sri Lanka is currently embroiled in a political crisis,...

Battle for the textile and apparel industry in Southeast Asia

The reasons for China’s decreasing presence in the industry Initiatives by the governments in Southeast Asia to boost the textile trade Vietnam and Bangladesh’s quest to conquer...

Education industry in India, an overview

Growth of private universities in the nation Future potential of the education industry in India   The education sector in India is estimated to be worth USD 91.7 billion...

Unnoticed growth of the media and entertainment industry in India

Overall industry brief Growth of the M&E industry and its segments Major supporting elements of this growth   Media and Entertainment (M&E) is a very wide industry...