Features / Focus

What’s Next? The Future of the Asian Art Market (2) Round Table

posted 20 Sep 2018

This conversation aims at providing an overview of the present and future of Asian art in the global art market, addressing the question ‘Is Asian content competitive enough in the global art market?’ Melanie Gerlis, columnist of the [Financial Times], Clare McAndrew, author of the “Art Basel and UBS Global Art Market Report 2017”, Adeline Ooi, Asian director of 《Art Basel》, Filipa Ramos, editor-in-chief of [Art Agenda], and Amy Sherlock, deputy editor of [Frieze] magazine join the discussion.

Clare McAndrew
Adeline Ooi
Filipa Ramos
Amy Sherlock

Melanie Gerlis


Gallery Weekend Korea

Speakers’ Profile

Clare McAndrew / Panelist Clare McAndrew / Panelist
Dr. Clare McAndrew is a cultural economist, investment analyst and author. McAndrew founded [Arts Economics] in 2005. [Arts Economics] is an economic research firm focused exclusively on the fine and decorative art market. McAndrew has been presenting annual reports on the global art market, and has conducted several research projects dealing with the impact of regulation and taxation on the market. She has authored the “TEFAF Art Market Report” from 2008 to 2015 and has recently been commissioned by 《Art Basel》 to further research the art market.
Adeline Ooi / Panelist Adeline Ooi / Panelist
Adeline Ooi served for two years as an 《Art Basel》’s VIP relations manager for Southeast Asia, covering Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam from 2011 to 2013. In 2009, she co-founded a cultural agency based in Malaysia, where her clients included artists, galleries, institutions, and both corporate and private collectors. From 2006 to 2008, she worked as a curator and a program director of Valentine Willie Fine Art gallery in Kuala Lumpur.
Filipa Ramos / Panelist Filipa Ramos / Panelist
Filipa Ramos is the editorin-chief of [Art Agenda], a world-renowned art media platform. She has lectured at Kingston University in London and Central Saint Martins. Ramos is the co-curator of Vdrome, a platform that presents works that cross the genre of modern art and cinema. She was also a research curator for 《Kassel Documenta》 in 2012 and 2017. Ramos is the co-writer of 『Lost and Found: Crisis of Memory in Contemporary Art』.
Amy Sherlock / Panelist Amy Sherlock / Panelist
Amy Sherlock is the editorin-chief of [Frieze] magazine, a magazine leading in the discourse of contemporary art. She also has a wealth of experience covering the Asian art scene. Sherlock has worked simultaneously as a freelance exhibition organizer and a director of 《Open Source London》, London’s contemporary art festival in 2016.
Melanie Gerlis / Moderator Melanie Gerlis / Moderator
Melanie Gerlis is an art market columnist and contributor for the [Financial Times]. She was previously the art market editor for [The Art Newspaper], reporting on auctions, art fairs and market news globally since 2007. Before entering the art world, Gerlis worked for 10 years at Finsbury, a strategic communications and investor relations firm, advising investment banks, hedge funds and other financial services clients.

Round Table

Moderator Melanie Gerlis, Panelist Clare McAndrew, Adeline Ooi, Amy Sherlock, Filipa Ramos (From left to right). ⓒGallery Weekend Korea

Moderator Melanie Gerlis, Panelist Clare McAndrew, Adeline Ooi, Amy Sherlock, Filipa Ramos (From left to right). ⓒGallery Weekend Korea

Melanie Gerlis: I would like to invite on the stage Filipa Ramos, who is the editor-in-chief of [Art Agenda], and Amy Sherlock, who is the deputy editor of [Frieze] magazine and also the commissioning editor for Asia. They are going to kick off the questions. Would one of you like to start the conversation with any questions that came up from what we’ve just heard?

Filipa Ramos: Good afternoon everyone. Thank you both for your presentation. I will start with a question that is a direct response of what you were talking about, Clare, just to continue your reflection on growth in art interests. While you were presenting all those different graphics, something that I asked myself was, ‘How can we assure that this relation between economic growth and interest in contemporary art in particular can continue to exist? How can we make sure that contemporary art remains a relevant asset in which it is important for people to invest?’ You spoke mostly about the economic growth. Of course, it’s something we cannot relate to, but it’s something we need to be aware of that because currently we have never seen so many people attending art fairs and exhibitions, and interested in contemporary art as we are seeing today. I think we all hope that this interest remains alive for all of us who work in art publications and for those who work in art fairs, art galleries, and institutions. You touched a little bit on that, but I wonder if there is something you have been reflecting on this relations.

Amy Sherlock: I have a question that is a preface to that. When you were speaking about the art market in holistic terms which presumably breaks down to their subsets within that, how much of the growth in the Asian art market that you’ve identified has been driven by contemporary art specifically? How much has been driven by classical works or antiquities? Is that all part of it and is that in your analysis?

Clare McAndrew: I don’t have the exact numbers in front of me, but if you look at the global art market or the percentage of contemporary sales, for example, the US and UK have a huge slice there for over a half. In Asia, it’s the smallest slice in most countries including China. The big sectors are some of the more decorative sectors: older Chinese paintings and things like that. Contemporary sales are actually the smallest in terms of value.

Amy Sherlock: Is it also growing?

Clare McAndrew: Yes, it is growing. Just because these countries don’t register on this global chart, it doesn’t mean that they don’t have very dynamic local scenes. It’s just that the price level and the value on aggregate is not enough to get a big slice of that pie because it’s so skewed towards the US and UK. I think one of the big problems in keeping people interested in contemporary art is that there is a really bad infrastructural problem. As an outsider looking into the art market, I see a heavy focus on the top end and a focus in the media, but only a very select and small group of artists can ever make it into the media.

We talked about this earlier as well. These days, people’s collections look the same because they all buy the same artists and they are not taking risks. There are probably 30 artists that everybody wants to buy around the world. I think the danger for these dynamic scenes is not getting on that pie because everybody focuses on the same artists and then there isn’t enough interest. It’s a big problem because for the high-end galleries and everyone else like that to keep on going, they need to be incubating at the bottom of the cycle to develop their artists. Once artists get to a certain level, they can sell in London, New York and Hong Kong. There is such a focus on this high end that artists of this level are cherry picked by big galleries.

I don’t know the answers how we address that. The middle market has suffered greatly and my figures which show fantastic growth mask so much of what is going on underneath. That fantastic growth has been driven so much by the high end. If you look at auction sales over the last 10 years, the market for works over 1 million has been going on at about 400%, the market for works less than 1 million has been negative, and the market above 10 million has been growing by thousands of %. They influence the figures so much. When I say the markets have boomed over 10 years, it’s very much the top end that has boomed. I think it’s the same in the contemporary market with the focus only on a limited number of artists. I don’t know how you get people to take more risks and support more mid-sized galleries. I think art fairs are very important in how things are placed with each other and how they are publicized in the media as well. We know that the headline generation thing is sought for this ridiculous higher amount. There is some way to make the middle market more interesting to the general public and get a wider variety of people involved in the art market instead of the same collectors going around. I think if we could get young people and new collectors, making them feel more comfortable in buying, it would be a great start.

Clare McAndrew ⓒGallery Weekend Korea

Clare McAndrew ⓒGallery Weekend Korea

Amy Sherlock: I would love to hear Adeline’s thoughts on this.

Adeline Ooi: I think everything that Clare said is true. The mid-market is one thing. Also, I think that the collectors, who are very similar to Uli in spirit, collect only the art from their own countries. It’s not just about the media, but also how much bigger and faster today’s society is. I think what goes undocumented and unmentioned are some of these great collectors, who are moving along in their own world and don’t necessarily need any international attention, but are just quietly collecting and supporting their local art scenes. We have that, just speaking from my perspective in Southeast Asia. You see so many different collectors who will tell you, ‘Don’t invite me to your fair because I am only interested in art from my own country. I am just going to waste a space in your show’.But my answer to them is, ‘No, you should come because you are also an inspiration in so many ways and this is counter to what is trendy which is ‘I want the first 30 top names that everybody else has’. So, I think lot of it is also about people’s mindset. I think it is also true about the mid-level area of the art market needing to be supported more, but a lot of it also goes back to infrastructure. It goes back to infrastructure and education.

It’s true that some people buy art because what they see in the headlines and immediately they assume that its asset is a great investment. On the flip side, I think there is also the greater good of supporting culture that we all know. I think there isn’t enough of that going on. Sometimes we have to deal with the economic state of the government, ‘I need to sort out health care and education before we can do culture.’ Fair enough, but for us in Hong Kong, there is such a captive audience that we are having to turn people away from the convention center during the week of our show. It shows you that there are people here who are interested in art who may not have means to buy, but you never know. It’s about influencing that society and the community. It’s about getting people to actually appreciate art and not think that it is only for rich people and only available to rich people.

Melanie Gerlis: Do you think there is also an economic parallel here? I think we are very polarized in the West because we have very rich and middle class, which is growing in other countries. Actually, that gives me a bit more hope for the future art. Maybe there will be more incubating and more nurturing once the systems are in place.

Adeline Ooi: Just looking at Clare’s chart gives me hope because I think that we already know that Asia is growing. I certainly hope that particular nations within their own ministries of cultuer will do their part in terms of developing the audience of art. Korea is a great example of this and to a certain extent, Japan. India, a country which is so rich with talent is also such a literate society. It’s a shame that they can’t do more in terms of establishing more public institutions in terms of greater education. I think generally most people in Asia would never think of buying art because ‘Why do I buy art when I can buy watches or properties?’. Let’s not forget the fact that a lot of Asian countries are made of migrants. My mother would tell me, ‘Don’t forget your passport. Make sure you have some gold on you because if you ever need to run, this is your currency’. For most people, buying art would be like, ‘Why? I can’t run with it’ unless it is a miniature of some sort. People in Asia have only been really buying art for the past 15 to 20 years, so the notion is still very new and is something that people come to appreciate. If you come from a very wealthy family of the past, you know the public role and your role as patron to support society. But that’s so few and far between within the sort of Asian context and Asian families who cannot afford to do that. It is just becoming apparent now with the growing middle class, where for some people it has become trendy to collect art. They collect without knowing why they are collecting and they have the mindset of, ‘My friend bought it, and so now I feel the peer pressure to buy the same’. It’s all sort of very new and young.

Amy Sherlock: It’s really interesting that you talk about art and state-sponsored infrastructure because that’s what China actually doesn’t have. Nine years ago, it was the only contemporary art publicly funded institution. What fills that gap is the very high-end collectors who are not only influencing the market, but also art education at that level which is interesting. I wonder what the outlook will be further down the line.

Clare McAndrew ⓒGallery Weekend Korea

Amy Sherlock ⓒGallery Weekend Korea

Adeline Ooi: I am hopeful about China and I think there will be more. If we think about biennale in Shanghai or about Guangzhou in southern China, there is so much happening there that shouldn’t be overlooked as well. Different states, different provinces and different prefectures all have all their own governing. For example, Shanghai realized that it has cultural currency and has really done a lot. As a result, we have Shanghai Art Week. I think you will see more of that happening in China and I hope that you see more of that happening all across Asia. Singapore does a great job with that, but then there is an imbalance. They have got great national support, but the market isn’t substantial enough, so it lacks in a certain way. It’s always about finding a right balance.

Filipa Ramos: Expanding what Clare was saying about the current challenges to medium galleries, a phenomenon that we have assisted on in the past is the growth and the multiplication of galleries that became quite big, especially Western galleries that started opening franchises. They franchise themselves here and there and everywhere and also in Asia. Thinking about this led me to also question the basic title of this panel, ‘Can we think about a future market where there is a bigger integration, bigger dialogue, and exchange between Asia and global markets?’ Clearly there is a very strong attempt from commercial galleries to become global, to lose their local presence and to grow and to expand themselves to other regions. In the near future, can we think about a market that is more global?

Clare McAndrew: Yes, I think so, but these are wider issues. I didn’t mention education and travel and all of those things. We have been just looking at the market opening businesses. That is a very simplified view of what is going on. There is a lot bigger picture than what we are saying. I think there is such a focus, at the moment, on producing children as these little economic units that are good at finance and good at sports. Art education, particularly contemporary art, is probably not on the curriculum for most schools which is a bigger issue. I know these things are long-term and nobody really wants to get into it because it takes too long, but they are the real underlying things. I think in terms of the openness of a country, it needs to have a two-way flow as Melanie was saying. The reason why Hong Kong has become such a hub in Asia is that it has that kind of twoway flow. If you look at the index for economic freedom for 2017, Hong Kong is number one. Singapore is number two and even the US is down near 20. I think it’s about 17 or 18. China is much further down at 100. The fact that Hong Kong has such an easy two-way flow and they are open to developing as a safe place to do a business and stuff as well is what makes it such an important regional hub. I think we have seen that in often countries as well. I’m just thinking of Ooi who was discussing Brazil. Brazil has been really good at pushing art out into the world, but it is really difficult to get international art back into Brazil. It’s down to the exporting side being really good at making sure that Brazilian art gets out into the world, but getting art back into Brazil is almost impossible because of complicated taxes, important rules and fees. They do get temporary allowances for fairs, but we should be learning how to make sure that art is not just coming out, but also getting art back in.

Melanie Gerlis: I found what Adeline said during the panel very interesting, that our world is becoming unfailingly global. I think I woke up in London this morning. I’m not sure. There does seem to be a craving for more and more local. Five to ten years ago, every fair that opened was an international fair and we suddenly realized that we had enough. Now we have 《Art Basel》, possibly 《Frieze》, and we have a couple of older art fairs that are international. We don’t need every other fair to be international and it’s actually quite nice to have some local as well.

Moderator Melanie Gerlis ⓒGallery Weekend Korea

Moderator Melanie Gerlis ⓒGallery Weekend Korea

Amy Sherlock: I just want to return to Clare’s point about the favorable regulatory systems. Do you think the fact that it is so difficult to do business in China will stop Shanghai and Beijing becoming the global art centres that Hong Kong currently is?

Clare McAndrew: I think they will find ways around it and the government is very eager to do that. There was something last year that reduced import VAT and things like that. Besides just fixing the regulation, there are things that we have discussed that take time to develop. When I talk to galleries in Beijing and Shanghai, they tell me they can’t access to some of the ancillary services because they have all been taken up by the auction sectors. Specialized shipping and conservation, and all those things that you just take it for granted in New York and London. Those businesses are not developed as well. This is why the art market is so important as well. They are not just sales for a few rich people. It supports so many businesses and has such a positive ripple effect in the economies which is an important thing.

Filipa Ramos: Do you want to add something?

Adeline Ooi: I agree with that, but there is always something to add about southern China. It’s something that you should always really concentrate on. Yes, Beijing and Shanghai are definitely on the global front, but I think southern China also has its own hold. I think as a geographical and locational hub, there is also great potential that will come up within southern China. For example, Shenzhen is a fashion design center and design incubator. Let’s not forget the number of institutions in Shenzhen.

Amy Sherlock: Biennale opens in December, right?

Adeline Ooi: Biennale is coming up. There are several other privately-owned museums that also have public programs. That’s some sort of recognition. In so many ways, if you think about infrastructure and museums in Asia, broadly speaking, they will often come to stand for private initiatives. Whether it’s in Korea, or somewhere like the Philippines or Indonesia, these are basically private-for-the-public, which are very interesting study.

Melanie Gerlis: I think a lot of our museums, even in our old system, are private museums. I am not saying every single private museum in China will be a roaring success, but one or two maybe.

Adeline Ooi: Absolutely. Without something like, for example, Long Museum or Yuz Museum, how else will you see art apart from galleries?

Melanie Gerlis: I was just thinking about India. Maybe one of the things that happened in India that everyone got terribly excited about was art as an investment. They went in on contemporary art and it all shot up and made people a lot of money for a year, but then it crashed very seriously. I think that maybe put people off in India. You were talking about the attitude in Asia that they are not sure why to buy art. Do you think there is too much of the opinion that it needs to be an investment, or is that changing?

Adeline Ooi: I think it is definitely changing, and changing on two fronts. In the past, I knew collectors who used to only buy from auction houses. And, now you see that sort of mindset is shifting and eventually realizing, ‘Oh, I can actually buy these from a gallery!’ You see that changing, and you also see collectors actually buying art for the love of it, and you see more of that now. It was funny because I heard Richard saying that nobody wanted to buy art that wasn’t going to be valued at above certain price. I think it’s definitely true that no one wants to make a loss on art, and you can’t take that away from any collector’s mindset. However, I increasingly see people buying art because they like it, even if it isn’t worth a lot of money. This is especially true of the young generations who are between 30 and 50 years old now, and from the upper middle class who are gaining more wealth and driving the art market. In a sense of buying, ‘I will buy video even though everybody says it’s no value in video, but I like it.’ Seeing people like that gives me hope that opinions towards art as mere investment are changing.

Adeline Ooi ⓒGallery Weekend Korea

Adeline Ooi ⓒGallery Weekend Korea

Amy Sherlock: Clare, could your statistics be broken down according to the division between the primary and secondary markets? What is driving the growth? Is it auction sales, or actually smaller galleries?

Clare McAndrew: The growth in China has been very much driven by auction sales, unfortunately. It is unlikely that some primary artists interact directly with the auction sector, so it is mainly secondary market sales. I think it is something that’s low at the moment and hopefully something they will develop. In 2012, particularly in the auction market in China, the art market took a big drop after a period of rapid growth. The government has been scrutinizing the market and trying to sort through and find any dubious practices, which has dampened its growth. Every market wants a slow and steady growth, rather than a sudden spike that is inevitably going to drop at some point. When there are too many speculators, a rush for liquidity usually follows. We saw that in the Japanese case, there was a sudden drop related to something else and everybody tried to get out at the same time. Even with the fact that the market in China now has more scrutiny from the government, it still needs a lot of regulations. There seems to be regulations in place, in some cases, but they are not enforced, such as the non-payment at auctions. There are lots of issues that need to be still further, but the fact that it’s a slow and steady upwards will hopefully be the way forward.

Filipa Ramos: I have a question directly to Adeline about concerning models, formats and galleries, and relationship with 《Art Basel》. Art fairs are playing more and more a large part in the economical transactions that are being done. Most galleries will tell you that they sell very little in their galleries and all the sales are done at art fairs. Taking this into consideration, knowing your role and responsibility at a huge art fair, what do you think that the future model or the future possibilities of commercial galleries will be? Will it be beyond its physical existence in the space? How will it relate to the space of the fair?

라운드테이블 현장. ⓒGallery Weekend Korea

라운드테이블 현장. ⓒGallery Weekend Korea

Adeline Ooi: This is interesting because I think it’s actually the flip side from the Asian context. A number of galleries are coming to, for example, Hong Kong shows. Galleries from countries such as India, Indonesia and Philippines realized that they have local buyers for their art. In fact, they don’t really need to come out. Coming out, to them, is a loss because they have to pay for their booth and shipping, so their attitude is usually, ‘Why burn a hole in my pocket?’ But for Asian galleries, coming to Hong Kong is a very different platform. It’s about exposure. Someone like Paul Lamo says, ‘Art fairs are like magazine advertisement.’ People might not buy, but getting my artists’ names out there. The Asian gallery model is slightly different in its approach towards art fairs. I understand that there are certain galleries from particular countries, like Brazil or Greece who do a lot of business overseas because the economies are just not there in their own countries. This is the flip side of the story in Asia because I think the opposite is true, where actually I am trying to convince galleries to not presell their works before they come to art fairs. Then what’s the point? In fact, the point is to try to make new friends, meet people, and spread the art out there, plus it is great for your artists to be placed beyond your own local shows. It used to be quite challenging to try to get people to actually play that game. More and more now, I think galleries are aware that this is the one time when they can actually meet clients from not only most parts of Asia, but also from Europe, America and Africa. It’s really understanding that there can be an audience for my artists beyond my local shows. I think the other thing that we should never discount is that sort of mentality that, ‘Asian art doesn’t get a lot of credibility beyond the local shows because it has never been shown in any great international institutions.’ In some ways, like it or not, Asia will still need the validation of the West. Like it or not, when a show happens at the Guggenheim, it changes everything. But this is what it is. This is the benchmark for all of us within the art world. It’s that feeling of always being the underdog, but you know you are not. The model has to change and your mindset has to change. It’s not that we don’t understand the Western model, but people move away from what they have learned. Contracts, commissions and consignments are a relatively new thing for all of us in this part of the world, whereas in Europe and America, you already have that book, and here in Asia, we are still trying to figure out what the information is. Standing as the director of 《Art Basel》, I’m conflicted because galleries ask me, ‘Why do we always have to play by Western rules, Why can’t we do what we do, the way we like it?’

Melanie Gerlis: I think there are authorities in the Western system and I hope that this kind of exchange will iron out, to be honest. Are there any questions?

Audience: I think the Western art market and Asian art markets are a little bit different. In the Western art market, buying side and selling side move together, but in the Asian art market, they don’t. For example, in the case of Korea, the Korean art market has shrunk since 2009 and has been shrinking constantly by at least 30% since its peak time. However, buying side has doubled, and I think the reason is that collectors buy Western contemporary art, rather than Asian contemporary art. Supply side of the Asian market failed to attract Asian collectors as well as Western collectors. Even though people expected the Asian market to grow, selling side of the market has not grown much at all. Even though Art Basel Hong Kong started from 2012, they still are reluctant to get in the big art fairs such as 《FIAC》, 《Frieze》, 《The Armory Show》, etc. That is because the selling side has grown so little.

Melanie Gerlis: When you said, ‘selling side is growing’, do you think there is a mismatch because people from here are buying Western art, but there aren’t enough westerners buying Korean art?

Audience: That’s exactly it.

Melanie Gerlis: I didn’t know.

Clare McAndrew: I think it is a very strong point that the two sides are dislocated. This is what I was referring to earlier; there are very good and dynamic contemporary art markets in many of the small markets in Asia, but they still don’t generate a high enough value of sales. A lot of collectors in Australia and Japan and all the other countries buy elsewhere. They don’t just buy Western art, they also buy Asian art outside of Asia. Most of it is now so centered in Hong Kong with Art Basel, Christie’s, Sotheby’s, and big auction houses centered there. I think you have hit the nail on the head exactly. The buying side has been growing so rapidly, but the selling side with the exception of China has been growing at a much slower pace, which is a very interesting thing. I have been to China for about 10 years, and there is a huge interest in what Western models offer. There is no reason at all that they should make all of the same mistakes and do all of the bad things as well. However, I think it is a learning curve and the Asian market will do the same things.

Melanie Gerlis: Adeline, I noticed that your fair in March had a lot of Korean art. Maybe not contemporary art, but I get a sense that is also shifting but

Adeline Ooi: I definitely can’t disagree with the person from the audience; it’s true. And it also agree with what you said, Melanie, it’s slowly shifting.

Melanie Gerlis: Are there any other questions about the market in general? Super. I have to say, Clare, Adeline, Filipa and Amy, thank you so much for being such engaging and lovely panelists. Thank you all for listening. Have a good evening.

Gallery Weekend Korea

Organized to support contemporary Korean art's advancement in the international art market, Gallery Weekend Korea is hosted by the Ministry of Culture, Sports, and Tourism and organized by the Korea Arts Management Service(KAMS). It is an international event designed to introduce Korean galleries and artists to leading art professionals and organizations around the world.

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