Asia Pacific Art Market Report Volume Two 2016/2017
Asia-Pacific Art Market
Consumer Behavior Analysis
By Adriana Alvarez-Nichol
Vice President, Hong Kong Art Gallery Association
Founder and Director, Puerta Roja Limited
Background and Strategy of Gallery
Our collector base is very diverse reflecting the broad stable of emerging and established artists we represent. For the past seven years, we have been the only gallery to specialize in introducing established and emerging Latin American and Spanish artists to Asia Pacific. Our priority is to open ground by introducing something new to both establish and young collectors in the region. 80% of our clients are based in Asia Pacific with 20% in the rest of the world. Within Asia, most of our clients are based in Hong Kong, Korea, Indonesia and Taiwan as those are the markets where we have focused our efforts. We also have clients in China, Australia, Malaysia and the Philippines. A quarter of our clients are corporate, institutional or more structured/formal collections; however, they represent a larger component of our revenue relative to younger buyers who are starting to venture into art. Both segments are an essential part of the development of the gallery and critical to sustain high priced sales for established artists but also further the career and exposure of younger ones.
Insight of Asia-Pacific Art Market
I believe that 2016 was a challenging market for a lot of primary dealers around the world, including Asia. Global economic and political uncertainty certainly created caution in a lot of buyers, slowing the aggressive growth seen in the region in previous years. Furthermore, clients are becoming more educated and savvier, particularly in China and other emerging art scenes such as Indonesia and the Philippines. Both trends have meant a flight to quality, both in terms of the artist, but also price transparency and client service. This has represented a challenge for galleries that were not financially or strategically strong and we have seen some of them close. However, these events, I believe, benefit more robust and professional art dealers that have a longer-term view to the market and who focus on developing deep relationships with their clients. In our case, in particular, the return to quality has meant that artists that we represent such as Carlos Cruz-Diez, who have a strong historic record but still produce exciting new work have performed very strongly.
Insights to Exhibition and Art Fairs
I think the development of deeper and increasingly connected regional markets in Asia Pacific is interesting. This can be seen very clearly in the changes in the art fair scene. The number of art fairs around the world has grown massively with almost 200 events around the world taking place within a year. Whilst Art Basel Hong Kong has established itself as the prime international art fair in the region, its success has also fuelled further interest and growth across the region. Long established art fairs such as KIAF or Art Taipei used to be primarily locally focused, but are now increasingly connecting with international galleries and institutions, with a strong focus on those from across Asia Pacific. New emerging art markets such as the Philippines and Indonesia are also growing and developing rapidly with the support from large local patrons and collectors. Regional art fairs are important because they not only support the local galleries, artists and institutions, but because they also build and broaden a new collector and client base. Strong regional art fairs with a growing focus on quality and content contribute to a stronger art market overall. They also provide international galleries that bring new forms of contemporary art with a route to connect with clients in their home territory. Art dealers get the opportunity to develop more meaningful relationships and a broader and deeper understanding of the client and his/her community. In turn, collectors and new art buyers get to experience a more diverse and competitive “offering”, eventually focusing on the strongest local artist that measure up to international standards as well as the best artists from abroad.
Freeports and Warehouses in Hong Kong
Hong Kong is de facto a free port. The logistics and tax environment allows us to conduct significantly more business with ease and provides the city with a significant competitive advantage. No import and export tax as well as no VAT make it the best option for collectors within the region to acquire art. That is one of the reasons why Hong Kong is our base to service clients across Asia Pacific.
Trend and Development in Asia-Pacific Art Market
I believe we will continue to see a deepening of some of the same trends seen in the last couple of years that will make a challenging environment for galleries that may not be on top of their game. I believe dealers, auction houses and art fairs will increasingly focus on other Asian markets shifting away from overreliance on the exponential growth of the Chinese contemporary art market, which saw an expected slowdown in the past few years. Clients and collectors will continue to become ever more knowledgeable, demanding strong quality and solid credentials from artists and dealers to justify prices. Furthermore, the blurring lines of the primary and secondary market with auction houses increasingly focusing on private sales will add more pressure to traditional galleries.
Galleries will have to come up with not only the best artwork, but increasingly invest in market education, content production, creative client engagement and opening of new markets. Whilst doing this, they will not be able to rely on “easy money” from growing markets whilst facing escalating costs in terms of rent, art fairs and online platforms. On the positive side, the decentralization of the market away from a few global centres and the growing interest in contemporary art by a broader public will create new opportunities.
All of these factors will demand far better strategic decision making, and in my opinion, also more collaboration amongst galleries and other art institutions. For example, joint shows for co-represented artists, city specific gallery weeks that bring new audiences, symposiums that provide knowledge to seasoned and new art enthusiasts will all become increasingly important. In short, galleries will need not only good art, but a clear strategy and a willingness to work with partners to reach success.
As a founder of the Hong Kong Art Gallery Association I am a firm believer that galleries can benefit each other, their artists and their clients by finding opportunities for collaboration. Since our foundation in 2012, the influence of the primary dealers in the city’s art ecology is now widely recognized and has allowed us to pursue with great success some of the initiatives mentioned previously. The relationship with APAGA is a natural continuation of these efforts. A joint focus on furthering knowledge, communication and the best of international standards can only benefit the structure and depth of the art market across Asia Pacific.
Taipei Art Economy Research Centre, Asia Pacific Art Market Report, Volume Two 2016/2017
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