Art Market Talk | The Art Market Now: A Contemporary Assessment

hi first I would like to thank our Basel for inviting me to moderate today's conversation on our market now and I would also like to thank our distinguished panelists dr. Claire McAndrew Bhavna Carlin Lynne Jong Way and Adrienne zuker we will be talking about the art market today from several points of view not only from the perspective of New York and London where the art market dominates but also from New Delhi Beijing Hong Kong and Guangzhou where our three panelists operate their galleries from we are looking at the state of the overall art market based on dr. McAndrews UBS art market report which was released around two or three weeks ago it gives the findings of the market from around the world including here in the asia-pacific region we will discuss if the market conditions for art differ and overlap in different parts across the Asia region because at least on the surface the art market the art world appears to be more and more interconnected over the last five or ten years five to ten years the art market in Asia has seemed like the new frontier I watched galleries from the US Europe and even Japan open up galleries in Beijing and later they shifted their attention to Hong Kong and to a certain degree Singapore and now it's all about Shanghai although the enthusiasm for art in Asia is nowhere on par with the almost fanatical passion for collecting in the u.s. it's almost a foregone conclusion that Asia is where the next generation of collectors will dominate but of course as Sotheby's presence here in Hong Kong since the early 1970s testifies collecting whether it's jewelry ceramics ink painting or other cultural relics collecting has very long traditions here in the region I was going introduce the panelists but stephanie has done that so we will hand it over we will begin by handing it over to Claire who will share her findings with us from the 2019 our market report thanks very much Lane I'm gonna do a very quick tour through the report there was a lot of content in the report this year if you get a chance to have a look through it so there was a lot of different things going on both positive and negative so I wanted to take a quick overview of some of the main findings I'm looking at the big picture I suppose the big result was that the art market as a whole was up in 2018 so the market rose six percent to sixty seven point four billion not sorry not as big a rise as as 2017 but still with that six percent rise and two years of increasing sales is the second highest level in the last decade or so one of the reasons why it didn't increase quite as much as the previous year is that there's a lot of different things going on so regions weren't performing the same the big diversion I suppose this year was between the US and China and also this continuing theme of different segments of the market not performing the same so the top end really driving growth and the middle and lower segments not doing quite as well just looking at some of the big markets as was the star of last year was probably the u.s. it grew to its highest level ever in history the growth was double the global average at 12% and the market reached just under 30 billion which is the highest level yes so strong auction sales and some of the dealer's reporting their their best sales ever but again you know a lot of diversity within the US market but overall a very strong year of growth and that the US continues to get it right on a few fronts it's a very strong base of wealth the different levels not just high net-worth wealth but also wealth in the upper and middle levels which supports a strong market it also has the cultural institutions and expertise and infrastructure and it also has a very friendly regulatory climate as well so as things in New York are not being bought by New Yorkers or even people from the US they're being bought from people all around the world and a lot of Asian buyers buying in New York because it's easy to get things in and out of the country and it's a very business friendly climate for sellers and it's a safe place to buy at the same time it's getting getting it right on a few fronts sorry I'll just go back one to the the UK I suppose everyone was looking at especially last year with all that kind of nightmare going on at the moment with Briggs that it's the most disgraceful politics so just been watching the last couple of days is it's a everyone kind of was looking at the UK to see what it the market fall apart up a little bit and despite all the worries with breaks that have actually had quite a strong year last year it grew 8% to just under under 14 billion and one of the reasons why it's doing okay is when we looked at the imports and exports from the UK eighty percent of the value of those are extra EU sales so the the bulk of the value of the UK market it's another entrepot market like the US sales are not reliant on just domestic buyers or even European buyers but the most of the value of sales is from Asia from the US so it's slightly insulated from what's going on in terms of intra EU trade policies but that that notwithstanding it's a very stressful time for a lot of smaller businesses that do a lot of intra EU trade but the reasons why sales as a whole I think haven't been quite as affected is that there is so much emphasis on on extra EU trade in terms of value but it's going to be one that everyone's watching and I think the EU market without the UK is going to be a very small and market that's been in decline over the last ten years it'll be an interesting one to see next year when we're measuring it without the UK if that is how we're going to be measuring and then China I suppose has been the most interesting to watch over the last 10 years as well if you think back to 2000 it hardly registered on the kind of global grid or the kind of share pie that I do and then in 2006 took over from Frances that there at largest art market and has been part of the top three for the last ten years and it didn't have a strong a year last year the gallery and dealer sector actually did quite well but that's quite a small portion of the market in China still it's only around 30 percent of the value of sales and that the large dominant auction sector declined by 9% so the value of the Chinese art sales declined overall by 3 percent to 12 point 9 billion and there's a lot of things I mean I think it's probably China acting a little bit more like a normal marketplace there was a kind of a frenzy of consumption really up to 2012 but over the last few years it's it's kind of dampened down since then and I think last year it was you know there's the economy slowed down there was a lot of worries about trade policies with the with the US and all these things filtered down into cautious buying but also interventive plans in the auction market because it remains a very supply driven marketplace so if fenders don't think it's a good time to sell then the market tends to contract so all of these things featured into the market in China and I suppose as I said it just behaved a little bit more like a normal marketplace I mean still looking at it compared to the US you can see it back in 2008 the US was nearly four times the size of the Chinese art market they kind of equalized in 2011 China was actually slightly slightly ahead and that the US has pulled away again but if you still consider China over a 10-year period it's grown by a phenomenal amount it's more than doubled in size in that period of time it's amazing to watch all of these changes are obviously filter into the global market share and the US again pulled away increased its margin to 44 percent but I think what's most interesting about this global share pie value over the last while is the dominant position of these three top market places so if you look back to 2009 there were only about 70 percent but for the last few years they've been 83 84 85 percent of sales these three market places so so the buyers are more diverse than ever before but where sales happen are very dominant in these three market hubs so in in the u.s. in in London and in in Hong Kong and China and this has been a dominant picture of the market for the last few years that this is where sales are taking place just taking a brief look at the differences between dealer and auction sales the when when the markets less optimistic and when people are a little bit uncertain as they seem to definitely be especially towards the end of last year this tends to play in quite well to private sales in the dealer market and dealer sales did very well here they increased to 36 billion but it wasn't it was a very unbalanced picture and if you see here this is from the dealer surveys we do dealers businesses with turnover less than 500,000 all declined on average whereas those above 500,000 all increase and the biggest increases were dealers with turnover between 10 and 50 billion which increased million which increased by 17% so it's a very uneven picture of growth in the dealer market it's the very same in the auction sector auction sales were a little bit more subdued in 2018 they only grew by 3% which was still quite a strong year considering we didn't have the kind of outlier variables like the United when she said the previous year so it was still still a strong year of sales but again it's very much the high-end market the sales above 10 million have really been driving the growth in the in auction sales this is just fine art auction sales but you can see the difference between the growth in the different segments and basically everything under 250,000 has been either low or declining growth over the last 10 years and everything over a million has been expanding and that was the case in 2018 works price to over me and all those segments increased in value where is that the sales below that that level declines so it's a very unbalanced picture of of what's going on in here in the market this this defining feature of the kind of high-performing high end and the moral act luster performance of the performance of the low end you know it's really being a dominant trend in all of the research that we've been doing for the last few years on the market so we looked a little bit more at the primary market and how it's affecting smaller galleries and it puts smaller galleries at a lot of risk if sales are volatile or not increasing as much as other higher value segments and in this piece of the research we looked at how reliant galleries are on a small number of artists for their turnover and what we found was that dealers turning over less than a million 64 percent of their sales come from their top three artists and forty five percent from just one artist on average so you can see the kind of very precarious position these smaller galleries are in especially if the the very strong performing top-end galleries are to cherry-pick some of these artists away I'm taking away that much of their turnover could be a catastrophe for these smaller galleries and this is also one of the big findings for the last few years with these galleries is that they have no access to external financing this is a big complaint from dealers every year in the surveys and the interviews that thanks won't lend them money so it's it's very it's a very precarious position and it's a big problem in the infrastructure in the art market that we might more another thing we looked at and this is what it's probably leading to is the decline and galleries opening the number of openings has declined by 86% in the last few years it's not necessarily the number of galleries closing although that's been highlighted a lot I mean galleries businesses closed in all industries but it's the number of openings has dropped dramatically and when you can see the high-risk position that some galleries are in it's probably easy to see what are these things filter in I'm just some some probably better news is what's doing well in the dealer sector this is how dealers make their sales that gallery is still the most important channel but art fairs have become a critical element of of dealer sales and they accounted for 46 percent of sales in 2018 this has grown from about 30 percent in 2010 so they're making very strong sales through fairs and using that a weighted average of sales we estimated that sales reached sixteen point five billion in 2018 so that's an increase of six percent so that's something that that's doing well for galleries sale at the costs to attend fairs are also rising they rose by five percent the unfortunate thing is what tends to happen is that again it's this problem is that sales are rising for probably the higher end galleries where the costs are more evenly dispersed but there is some moves underway to try and balance that a little bit better for smaller galleries and a number of the larger fairs last year have committed to doing small steps at least trying to balance the costs for different sized galleries in terms of booth costs and things like that so we looked into that into the report as well but another thing we found just just because we're here in Asia was a very interesting finding it on the use of art fairs as a form of purchasing and we did some really interesting surveys of high net worth collectors in five different countries with UBS and what we found that was that 73% and a 85% of collectors in Hong Kong and Singapore had either used art fairs as a channel for purchasing always sometimes they're regularly so that was a very strong finding and he I think was between five and 10 percent hadn't used them had never used an art fair and that was compared to about a third of the respondents in the UK and Japan so aren't fairies are becoming a very a growing interest for means a means of purchasing in Asia and also from millennial collectors in Asia they're also the most preferred way to buy art as well so that that's a kind of a positive I suppose I think for galleries to come out of the research as well another positive thing was online sales they've been growing quite substantially despite the ups and downs in the aggregate market online sales have been growing fairly consistently they're still freely small they're only about 9% of the value of global art sales but they grew by nearly 12% last year so average and the reason they're small I suppose is still people are still buying tending to buy at lower levels than the offline market but it is an area of growth and again it's an area where Millennials are very dominant and but by far the most likely to buy online was millennial collectors and it stands to reason this is how they kind of transact in all other areas of their of their lives and you know over 90 percent had bought a work online and some of them buying works at quite high levels so there was only if there was a very slim proportion overall in the surveys of those who bought art online for over a hundred over over a million but still four percent is not a huge volume of sales but it shows some activity by these collectors now these were all high net worth individuals with while excluding property of over a million and they'd all been active in the market for the last couple of years so they're not maybe you're a typical collector they're they're a high-end active collector but it still shows that there is an increasing trend to to buying online including at high levels and the last thing we looked at in the survey which we do in the report we should do every year is the economic impact of the market what I I'm always kind of relieved to see it was a slight decline in the auction sector and the dealer sector rose slightly is that employment in the market held steady it still employs around 3 million people in very high-value knowledge-based jobs around the world and the art trade also spends a huge amount of money in ancillary industries so there's over 20 billion spent by the art trade on conservation restoration packing shipping all of the businesses that go around supporting the art trade and that's held steady and that's a huge hugely important to the economies like hong kong that host big events like this that get an injection of cash and high-spending visitors when events like this happened so overall that would that was a positive thing and as I say the big picture I suppose was was up even though it was such a mixed bag thank you thanks Claire for sharing your report with us now I would like to ask the three galleries Bhavna Liang in way to talk about how you began your respective galleries what was the market like when you began for instance who are you selling to and how has your gallery evolved with the market today has the profile of your typical collector client changed over time I would my own gallery in China the [Music] Chinese regional textures outside of beijing nanjing ocean or even though regions further away from these urban centers started to have young PR dentists second generation and Ferengi high-net-worth individuals I wanted to participate in terms of weights more need for non-chinese it's actually gaining ground in terms of its share in the asian art market our talking Chinese special kind of quite on the periphery so [Music] [Music] [Music] generation my generation their work is more meaningful day by day in 2010 when I joined the art I started my career in the art in 2005 the market in India was at an all-time high and and post 2008 economic crisis I mean there was a lull in the market and suddenly prices dashed all of that the speculators and the investors that were around from 2005 to 8 and they did not mark it no way to be seen and and that is when I I mean I I'd always wanted to do I come from an art background art history and I wanted to do exhibitions promotes that not his work with certain artists who have been working with for some time since my qualities but in India there are no institutions or nonprofit spaces that allow at least at that point an independent curator to do exhibitions of their choice so which is why I realized that it is you know it is kind of I would want to open my own space which is not a part of my larger plan at that point and when 2009 2010 was quite a lull but 10 onwards the things started changing a little bit and the galleries actually saw people who are more interested the genuine buyers genuine collectors people who wanted to learn coming to the galleries I also launched my art publication at the same time so I have you know a publication and a gallery which operates separately and because of the conflict which you understand so yeah so there has been an 2012 onwards things change drastically in the Indian art scene because of the Kochi finally starting the India Art Fair had launched in 2009 as well which was kind of salmon tales to me launching latitude so I think slowly and steadily the collector profile has been changing so at that point there were not many who would travel to art fairs Ben Ali's things like that but over the years there has been a lot of outside awareness and an Indian art market is way behind China I would say or or the rest of the world but it's getting there yeah change this is a question for Lin before you began working with pace you found it I knew you as a independent curator when you found it can calm you in your own gallery and pace approached you and you made this very harmonious agreement with Arne to keep your gallery going and as Claire's report points out younger and mid-tier galleries are being squeezed out by the mega galleries and I think that we would agree that pace fits this description of the mega gallery pace has over a hundred and fifty employees working around the world selling everything from blue chip Modern Art to works by young Chinese artists born in the 1980s I want to know how do you negotiate this precarious situation and do you think you could keep Beijing coming if you did not also work for pace and if you have any advice for smaller galleries other than upgrading your career and joining pace [Music] [Music] do you have any advice [Music] [Applause] [Music] so um Jong way you have this really really unique model you have described vitamin creative space to me over the years as a gallery but not a gallery a school but not a school so I'm always very perplexed as to what vitamin creative space actually is and on your website it states in order to operate independently from institutionalized funding it is active as both an independent art space and as a you put it in brackets commercial gallery and you and your partner who fung you've put almost all your energy in recent years into your mirrored garden space which for those of you who don't know the merit garden space it's this huge semi rural village on the outskirts of guangzhou and to paraphrase again your website you write in on vitamin creative spaces website you write contemporary art practice meats farm oriented life practice so but you also show many of the most sought-after artists in the market like self a the kit yan fo and you also participate in art fairs all over the world so i want to know how do you make your particular vision of a gallery work would you contact young that you saw just like i've explained the stairs [Music] so you you haven't really talked about survival strategies I would like this is really for Bhavna and ujong way given the situation that Claire described in her report that only a small number of businesses mainly galleries selling at the very high end of the art market are surviving making significant profit profits whereas the majority really struggle to even break even I want to know what are your survivals ready strategies how are you scaling up your gallery how are you trying to broaden your market or Jong way is exclusivity a strategy for you [Music] [Music] [Music] do you want to share thoughts yeah so so when I the market was really at a low but I since I was opening and very very enthusiastic I took up ice my calories in an urban village called lattice era in Delhi and I took up a large space I took in fact three spaces down the road I took a separate office for my magazine two story stage space for the gallery so for the first three three or four years you know I honestly did not have a business strategy I just wanted to do the best I could for the artists that I was working with you know youth enthusiasm all of that never looking at accounts really and seeing the losses whatever just keep putting in and also the magazine so it was a quarterly at that point and the gallery funds the magazine magazine could not raise enough funds to you know sustain itself and so around 2016 I realized that I can probably no longer make the rent because I didn't own the space and 2017 I decided to shut down I was like oh the five spaces offices that I had down the road I brought it down to two so which was I mean to something which really you know I really bothered me and took my god I'm a failure I'm downsizing and then now I look like like she mentioned you know there's no strategy as such to but survival is important so the first strategy for survival does not pay you Trent and and make the landlords of Lara richer and and then do more pop-up exhibitions and maybe art fairs so now in between four three four years I stopped doing the fairs I did not even do the indie affair and back to doing that and so that and spend more time with the artists you know supporting their practice because while I was doing while I was planning so many of these exhibitions travel all of that I realized I also neglected you know some of the artists artists production I didn't being enough visits to the studio was because I was just planning one exhibition to the other so I would say that strategy now is chained spend more time with the artists planning solutions you know properly yeah so I have a question for the three of you chuckwei in Claire's report one of the strategies for galleries operating in the US and Europe where certain dealers have said that buying has plateaued or even fallen is to pursue a more internationally focused business model this translates obviously into participating in art fairs and less saturated places around the world or something more ambitious like operate opening up new spaces like pace and other international galleries in Beijing and Hong Kong and Seoul and Taipei so on and so forth I want to know if these Yankee American you newcomers are encroaching on your market and have you ever considered doing what they do for instance opening up a space in London or New York or Berlin Zurich or even just in Hong Kong each time I change a change [Music] [Music] [Music] [Music] [Music] [Music] different kinds of things probably have not really found the reason why we imperative to open the way of dealing with family in a logic you know different spaces will not you know try to avoid it for us for now Delhi such a youth market may be a base that I don't think the gallery has been able to potentially tap in you know the kind of collector base that we could build there so I think it'll take some time for us to even think of any plan to move out of the city India is a large country and it has different pockets and different markets there was conversation about moving the gallery to some tier 2 cities but I think as of now it's better that one does more of collaborative exhibitions because there are spaces within the country itself and travel exhibitions around there and out of the country and in India there is they've just been to galleries which have had multiple locations one was both he which shut down in about 2008 2004 New York Delhi Bombay and and for now there's Delhi Art Gallery which is present in three to four locations I think so yeah so for us Delhi's best so Clare I want to know what it means to galleries when markets shift from one established location to other high income countries or regions should they simply follow the money when their home market their domestic market is plateauing or falling do you think gallery owners are increasingly consider considering moving their operations to major business centers or where there is a huge population of wealth or are they considering to abandon the physical space altogether and only operate digitally or through art fairs Thanks um I think it's it down to affordability I mean it's not an option for a lot of galleries to have multiple locations and there's a lot of different strategies I mean just I was listening to very much wanted to bring his program here whereas other people have moved to a region and done the program that suits they think suits the culture of the area so there's a lot of different approaches for different galleries but um I think it's it's a lot of thing our galleries from the UK and the US and I'm talking to have described some of their existing collector bases being kind of literally maxed out from a kind of a frenzy of very high-end buying for the last large number of years and they are now looking to find kind of untapped regions and this is the kind of a survival mechanism and they're doing that through fairs that offer a global outreach that actually don't get them access to collectors like the larger fairs or trying kind of smaller fairs again but one thing of it I'm sorry it's not directly relation to this I just did want to point out also with the with the sales that I report its aggregate sales in different segments so I'm not saying at all that small galleries are not necessarily profitable and there is some very profitable small smaller galleries so sales it's not doesn't equate to profitability and some of the struggles and profitability last year were in the very large galleries I think this kind of is you know kind of reflecting what you're saying is that it's it's down to the individual gallery itself although there was more kind of losers in terms of sales in the lower end than gainers overall some some small galleries are being very flexible they're using kind of social media and different technologies very well that they're kind of cutting costs and kind of responding very well to the challenges but it's just with with all of the growth in the higher end it's really difficult I think it's without particularly without access to any kind of financing out the external financing less they have personal or other ways to access financing as it becomes very very difficult to survive so but I think it's not never meant to say in any way that very kind of clever use of business models in the smaller galleries segment but the the and the also the the findings I was showing about the how reliant they were on certain artists that came kind of by accident that finding we were looking at the thing of cross subsidization how many galleries support artists that arranged there's a tendency to say small galleries support emerging artists big galleries you only have very well established artists and that's not true because the big galleries actually have emerging artists as well and there's a lot of cross subsidization at all levels so it's kind of it's it's a funny way i classify them for the report because it's so kind of a macro economic description of the art market there's a lot of the kind of the nuances underneath that that need to be understood as well so i just to clarify my fingers slightly thanks your port your report also points out that art fair sales increased in 2018 and i want to know if this is a function of changing buying habits or just the growth of art fairs in general i think there is there's more consolidation in the in art fair sales and i think that a lot of the growth has been tied to also the larger galleries doing doing it extra well at certain art fairs as well and it's difficult to define an art fair say i was just thinking about this for subsequent surveys we need to kind of maybe hone it down a little bit more and report more about how a gallery defines the sale because a lot of sales don't take place at the fair itself i mean a lot of galleries are saying to me that people buy from their the preview that they send them without even attending the fair and then there's the the art fair sales that are made as a result of the fair and i think these are all kind of sometimes put into into the sales affairs but they're they're certainly a very dominant part of the gallery model and everybody's looking for an alternative and innovation but it doesn't seem to be one at the minute for the galleries I want to know how you decide which fairs you want to participate in how do you make that decision because there's so many right yeah in Asian Pacific region we always choose for the unfamiliar market emerging market but we also would like to use function to try those for example we have one we go to Taiwan we go to Korea in the past didn't have a specific quite international high caliber you know fairs but we went for the first time within China there's not a fast but you should advantage of Chinese pears is the size of the whole country scale so every city has sort of an expectation for fare and also it's not so high costs in terms of hosting of s so we've actually participated quite a lot of these you know domestic fest labor you do shuffle at some times we also have we want to make some friends new friends and just you know to spend our spirit and so we have to do a lot of public relations issues and not like Hong Kong Basel which which are much more oriented for winning or losing and bigger fest I think in China it's more sort of a flexible kind of an interface between market and collectors I'm sure the Chinese Fair is about so that's something something that kind of influence that decision when when it comes to where we want to go because as vitamin space.we the Sharps down we also have participate a lot in a lot of fun usually go to three for example it is so close so we cannot miss it so we always go context to that we count the location and also the institutional structure make sure we have a mutually complementary affairs to attend so we try to do there are usually a number of festivals and fairs that happen in the country itself which I was talking about there trying to promote out in tier 2 cities and and cities so we've tried to do that also to support Indian art in a way and an outside you know it's mostly in Asia that we've done the phase we did Korea and I'm at least and yeah so the initially the idea was to try to tap into the Indian collector base of that region so that's how we decided to participate in some of them and after participation realized that we sold mostly to either the locals or to Europeans and Americans visiting so so that kind of strategy didn't you know really work so yeah so it's it's just for your question but I want to know about UBS's clients expectations for art fairs today are they increasingly popular are your clients visiting galleries actual galleries themselves or they primarily visiting art fairs I'm not quite sure I can be so specific on on the end but I if I look at our clients I think it's it's very interesting to see that the interest in our tests has risen quite a lot particularly in the region I think and it's also so the whole art market and what Claire Bass has put in the art report it's a very nice reflection what's going on in the economy it's going it's it's a reflection on how wealth is actually starting to shift to two different areas and I think that's what we can see so so the region here becomes much more popular and people particularly the second generation Millennials are becoming much more interested in art so we always have to saying that the first generation builds the wealth the second looked after it and the first been said but if you have a first generation that is still trying to build the wealth the art the art part is probably less in in focus and now we see a lot of shift that is going to Millennials on the global study say around 24 trillion actually that already with Millennials and we can see if you look at numbers for example in Singapore nuts was one of the study we also saw that people had spent more than 1 million on one good of art was actually 64 percent in Singapore came out of the Millennials so we can see that the shift of wealth to the younger generation comes also long that these probably are not more involved anymore in their own businesses and they become much more interested in art and I think that's what we can see as a reflection also in the region so art fairs I just talked to one of my colleagues obviously our UBS VIPs tickets already have a black market price what I heard so it becomes very properly in the region and people are spending more on these goods I want to shift the conversation a little bit in Clare's report there was some discussion about doing business in China and I think we could this a bit to the larger Asia region the report talked about Western galleries doing business in China and finding major challenges in either slow payment or non-payment and I have heard independently Western galleries complaining to me about collectors in Asia even here at Art Basel Hong Kong asking for big discounts and of course there they also talk about buyers in Asia having no loyalty and loyalty I mean we're collectors value developing relationships long-term relationships friendships even building a coherent collection building trust sharing knowledge over many many years and many galleries have said to me that they're upset because Asian buyers don't buy and are they'll buy an artwork at any gallery that has the best work and probably the best price or the best discount and they're not necessarily buying at the same four or five galleries year after year so how do you explain this is this new kind of new wealth behavior nouveau riche behavior or is this more pragmatic consumption what about you as a domestic gallery a local gallery in Asia how are you coping with these kind of expectations by Asian buyers or is this just the new normal you don't even notice it because it's that you don't notice these kinds of demands or expectations it's as indeed and situation your current collectors and the relationship between the collector and the gallery is looser overall it's like that but of course there are in charge certainly collectors that are relatively closely related to to a gallery but overall I think it's a much looser configuration multi-voice but forth from the perspective of these collectors we also noticed management and investment perspective obviously a would has a less close relationship with the gallery but I think overall it's dominated by him at The Wealth Management type of relationship so that's why you observe some sort of a looser tie between the collector and the gallery developing because the market is so new and such phenomena are probably just a natural on the new market we're probably lucky enough to not have any of these really negative experience so far especially during outfits when you come back and you don't hear from the client you know yeah and I would say Sheen because I think it's a phenomenon all over and and the differences between collectors investors and buyers who exactly are you selling to and sometimes you don't know because it's the first time sale and like he mentioned you know it's a it's about well it's just for investing they really don't care to build up a relationship with the gallery because it's just about let's go and acquire not necessarily the best work the cheapest work biggest size you know all of that so they have different criteria of while buying and whereas I would say we built long-term relationships with many of the collectors over the years may not be buying regularly from the gallery but they watch our program they visit you know exhibitions so yeah so it is and the buyer in general you know somebody's doing up their house they come in I mean you know they just gotta go around you know match the furniture and the painting and just buy and that's it so it's I think it's categories of clients that one gallery has at least we do and we actually only have I just noticed only nine minutes left for one or two questions thank you thank you for the conversation it's been very fruitful I've actually two questions is it possible yeah thank you first I would like to ask despite the art fair sales is physical gallery sales higher than the online gallery selling the numbers it's generally still higher than the gallery sales overall this is a weighted average or forty eight percent of sales the art first forty six and a presentation I think it's around six percent of online sales sure so the physical sales in the gallery was still the dominant okay but that's a weighted average so you know some smaller galleries have a much higher proportion of of online sales [Music] more important component for depending on the size of the gallery so that's a weighted average weighted by turnover okay thank you so my second question is as Miss has mentioned the the situation of mega gallery squeezing out middle to young gallery is still is happening but I think this situation is not only about physical galleries but also online gallery platforms as well so for example pace has recently really announced the future pace project and I personally would like to ask if there is any advice for young generation students or people who are really interested in developing online online art selling platforms how do they proceed to a larger market view thank you I think right now this has not really entered into online platform do you want some bigger Matt Matt we do we do have a communication channel Rick relations do we just we just put the pictures there and we actually change that sales that way especially resale I think please sale is becoming critically important before you even know the show it's not just the people come and visit your booth and actually preserve and wait and then make their own trash even actually they kind of missed a lot of waste a lot a lot of business if they do that so one of them Chi chief characteristics is you won't see the original works but you make your decision decision based on the representations you see online so and the presets you will have hotter and you want to stimulate you need to create those really topical antioxidants from a kind of a man kids focal point for the market you don't do any prettier than the physical art affaire you will encounter some sort of let's say drawbacks is which especially in the last couple of years I think one always I think during art fairs we saw we have experienced just another thing is that gallery director future development you know technology so much how do we as well as highly saturated I and so we're kind of trying to explore my personal prosperity we create create more issues topics to keep relevance and competitiveness one more question hi hello I so I would like to address something to Adrian and this is a reflection on your comment about the shift of interest between collecting people being transitional generational you said in the first generation was the money the next generation gets bored with running money and then starts to perhaps look more at art now I am by this logic how do we you know complete this what happens because assuming that this is cyclical does then the next generation go back to earning money or do they become artists and and do you have a plan of action for that I think it depends on how they spend it right so if if they spend it wisely they probably don't have to go back but I think would be well we can see when I was simplifying the whole the whole situation a bit we we're probably living in in a time where we we face basically the biggest transfer of wealth in 7/7 way so if you look at our clients at UBS 40% of our clients or above 70 years old more than 30 percent between 50 and 70 and and only only less than 30 percent below 50 so when next few years over the next decade there's a massive amount of transfer of wealth not just to Millennials if you look at the u.s. we expect around just 41 trillion of assets will be transferred until 2030 and 70% of these assets are going to women and it's also trend what we would we have figured out was to cut the risk Claire and some of the surveys we do with our clients with regards to our said women become much more active in the art market out of the top 200 collectors we have asked already a quarter of them are as low on women deciding and then you have more than 60 that actually are acting as a couple and if I would look at my relatives my wife it's probably the women that decides at the end so we could say that already more than half of the 200 top collectors are probably directed on the decision of which which are we buy women so that's how it is and we as as UBS is whether in wealth manager we want to grow and and protect the well for our clients we we don't look old as an investment per se so we're not of course name it as a sort of an asset class we were actually rather do think that people that do and should have a big passion for it and it can be a storage of of wealth and value but probably should not but also have it with discounts try to buy arts as a sort of investment try to make big returns it should be a passion in it and you probably want to have a sort of a goal achieve with which the collection you put together thank you we have to wrap it up I want to thank all our panelists for sharing their experiences with us and for claire for putting together this very informative report and thank you all for joining the session please go into the art fair and buy some art knowing that you will be supporting a gallery and by extension supporting an artist and an entire economy so thank you

Channel: Art Basel

Views: 10,268

Rating: 4.7159762 out of 5

Keywords: Art Basel

Id: LalFrwAZhIU

Length: 84min 39sec (5079 seconds)

Published: Thu Mar 28 2019