The globalization of the art market is not a new trend; as consumers are connected to markets via the internet, the ability to find, price, and purchase goods and services worldwide increases. The market for fine art is not immune to this happening, as buyers can view a piece of work via digital photos, make a purchase, and have it shipped to their desired location. Additionally, one can hardly find an art exhibition these days without the worldwide exchange of goods and services that stimulates several industries (shipping, security, production, etc.) and yields immediate and tangible benefits to art professionals as well as the general public.
This has allowed for the change from an obscure market dominated by “experts” and those with funds to make difficult acquisitions happen, to a more transparent market filled with fresh players who see the value in fine art and wish to have a stake in it. But how has the globalization of the art market affected participants? Let’s look at some of the benefits and detriments to the changes exhibited in the fine art market:
- Artwork is purchased by an increasing number of buyers. Fine art has gained in popularity; a low interest rate environment and years of heralding of the advantages of a diversified wealth portfolio has driven investors (and art appreciators) to look for assets which bear no interest (plus provide aesthetic value). From original creation, shipping, advertising, to final display location, art is traded across multiple borders.
- The Chinese market continues to grow in this globalization of the art market, confirming its position as world leader in the fine art market. Since the Chinese government reduced the import tax on artworks by one-half, beginning in January 2017, art investing and international trade continues to grow rapidly. Chinese art portfolios are increasingly diversified; Asia has a larger percentage of high net worth individuals, and as savvy investors, they understand the value therein. In fact, Sotheby’s reported that in 2016, 5 of the 10 most expensive sets of art they sold were done so by Asian clients.
- Strength of the United States economy has supported the increase (or at least stabilization) of the local fine art market. Even with worldwide political turmoil, the art market is projected to remain stable, perhaps due in part to the fact that buyers need not travel to purchase works.
- There is also a dramatic increase in lower-priced works (those under $10k), rising to 56% of the market share due to the globalization of the art market.
- Small and mid-sized of artists, galleries, and auction houses are feeling pressured to compete in this global market. The costs involved in competing internationally can be stifling for those without a big brand name. The gap between the top galleries/auction houses and the next level is widening. Further, artists who cannot embrace the nuances of the art market may struggle to find an audience, with the market being packed with competition.
- The globalization of the art market has created an increased demand for museum-quality works, as art collectors become increasingly savvy and educated about quality and styles available. This has created more demand for these pieces, and museums are increasingly in competition with private collectors for these works. Museums are relying more on donations and sponsorships to acquire pieces historically obtained almost-exclusively for them.
- The increase in lower-priced works drives demand away from the highest priced pieces, and a younger generation of wealthy collectors is feeling more confident to invest in emerging artists. Those who are holding the most expensive pieces are holding on to their assets, waiting for better price opportunities.
- Fine art remains an uncertain investment; it is not a black/white market, and shifting demand and variations in popularity will always remain a factor.
- A world fraught with political uncertainty, especially in art market leading countries in Europe, can assure relative instability in the foreseeable future.
- There is recent growth in Old Masters artwork; with a general limitation on number of pieces available, there is no confidence in the continued availability of these works. It is interesting to note, however, that several pieces from “minor masters” have been found in France which have been in private ownership until now.
- The globalization of the art market has led to the modern art prevailing in the western art market, including a variety of styles, including Cubism, Expressionism, and several types of Abstract art. This represents the largest inventory of high quality, historical, and stable works in the market.
Future Globalization of the Art Market
There are only a handful of characteristics of the global art market in which players can take an active role. To compete in this global art market, all players will need to grow (or solidify) their online presence. Galleries and auction houses will most likely find that strengthening relationships in the art purchasing process (shipping, appraisal, insurance) will assist them in increasing market share, and artists will need to hone their marketing skills to expand their audiences. Since collecting art is more personal taste and less investment skill, the individual collector must rely first on what inspires them before considering what working within the art market entails.
Professionals at Sybaris Collection are dedicated to finding the perfect piece to fit your taste and complement your collection. Searching worldwide for unique pieces by renown and emerging artists, their personalized attention ensures you find art work to suit your individual needs. Allow us to help you build or expand a collection you can be proud of; one which can not only provide aesthetic but financial gains!