Is India ready for an art revolution?

China has emerged as the stronghold of the global art and collectibles market. In less than five years, Chinese auction houses have grown to be among the biggest in the world, flexing their muscles in the domain of fine art, jewellery and antiques.

According to The European Fine Art Foundation (TEFAF), China recently toppled the US, which ruled the global art scene for centuries. China's share in the world art market rose from 23 per cent in 2010 to 30 per cent last year, with Hong Kong emerging as the new global hub of art transactions.

The US has been pushed to second position with a 29 per cent market share, while the UK and France, with 22 per cent and a distant 6 per cent are third and fourth place contenders, respectively.

At the global auction market in 2011, China emerged on the top by garnering over 40 per cent of fine art auction sales revenue, followed by the US (over 23 per cent), the UK (19.4 per cent), France (4.5 per cent), Germany (1.8 per cent) and others.

RISE OF CHINA

These facts represent a significant shift in the art landscape of the world.

In the recent past, the Chinese art market has undergone a revolutionary change. Today, half of the world's top 20 and five of the top 10 houses are Chinese! In 2008, 11 of the world's 20 top-selling artists were Chinese. One artist — Zhang Xiaogang — alone had auction sales totalling $56 million in 2007.

The best selling artist in 2011 was again a Chinese artist — Zhang Daqian (1899-1983). The late painter surpassed Pablo Picasso and gained the top spot with a grand auction sale of $506.7 million.

In the same year, the second position among global best-selling artists was bagged by another Chinese artist, Qi Baishi (1864-1957). The latter's work earned $445.1 million. In the art world, the Chinese dragon is certainly soaring high!

A key factor contributing to the meteoric rise of Chinese art is the large amount of capital flowing into the market. Initially, as with all developing nations, the capital entering the Chinese art market was mainly from abroad, with the West pouring in more funds. But with the recent economic upsurge in the country, investment in art has become a natural choice for many Chinese millionaires and billionaires.

The country's continued economic growth put its HNIs in a strong position, and domestic capital moved from sectors such as real-estate, energy, stocks and finance into the collectibles market. This enormous infusion of both foreign and domestic money has boosted prices of not only the classics but also works by contemporary masters.

While Christie's and Sotheby's continue to auction an extensive number of Chinese paintings and artefacts, Poly Auction, a leading Chinese Art House, is gearing up to become the world's second-largest publicly traded art industry. 

INDIA'S CHANCE

In terms of auction sales, Chinese artists are now on top of the heap. However, it is worth noting that the pace of Chinese art market's rise has also given rise to speculation on whether this is a bubble in the making. The widening price gaps between Chinese and foreign art make the former seem too soapy, driving many foreign investors to cash out their holdings of Chinese art works.

What should India learn? The fact that a collector will have greater affinity towards artefacts from his own land and culture is largely contributing to more and more Chinese supporting their native artists. The Indian art industry should follow the lead by rediscovering and supporting homespun talent.

India's share of the global art market — at approximately Rs 700 crore — is still less than 1 per cent of a global art market which is currently worth 43 billion euros. However, the Indian artscape is evolving; a recently organised India Art Summit 2012 was a huge crowd-puller, with participation from 90 per cent of the roughly 90 Indian and international galleries, and with each selling between one and four works of art.

The legends — F.N. Souza, S.H. Raza, the late M.F. Husain and Jehangir Sabavala — are gradually finding a place in every art connoisseur's hearth. Economic prosperity has spawned a new breed of art collectors who are willing to pay a premium for prized pieces.

Although the road is long and winding, the Indian Art Market is steadily gaining steam. Till 2006, Indian art prices were, on average, a meagre 0.8 per cent of global prices (rising to 2 per cent in 2010) and a fourth of Chinese prices. In about five years, China has edged closer to benchmarks set by the global market in all aspects — prices, market share and market size — while India is still picking up speed.

This highlights the opportunity and huge potential for Indian art. An interesting point to note here is that our art market size has grown to 20 times its original size in less than nine years, whereas the global art market size has only doubled in the same time span. At $140 million, the current Indian market is just half the value of the most expensive global art work, a telling indicator of its growth potential.

DRIVING FORCES

Some key factors driving market growth include the rapidly expanding base of Indian corporates and high income individuals and the associated emergence of a museum-going culture in the country. A greater awareness of interior design and aesthetics is also playing a tertiary role. Foreign and Chinese collectors, although still partial to ‘home grown' art, are now showing more interest in the work of Indian artists.

The Chinese market truly came into its own when foreign collectors started buying Chinese art and Chinese collectors followed suit. A similar trend can also be created in India.