Art galleries bounce back from the brink

A NEW study by Art Basel and UBS saw most galleries recovering in the first half of 2021. Of the over 700 art dealers surveyed in 54 regions or countries including Singapore, slightly more than half saw an increase in sales versus the same period in 2020.

In fact, Asian dealers saw the most improvement, with an average increase of 18 per cent in sales. In contrast, dealers in Europe suffered an average drop of 7 per cent.

Most job losses incurred in 2020 were also recouped in 2021: The number of dealers hiring (25 per cent) was higher than the number of dealers shedding staff (13 per cent).

Large galleries saw the most improvement: Dealers with over US$10 million in turnover reported the highest average change in sales (21 per cent).

Dealers with a turnover of less than US$250,000 saw sales decline marginally below the same period in 2020. And mid-sized dealers in the US$500,000 to US$1 million turnover segment saw values decrease by 3 per cent on average.

Among collectors, wealthy millennials are leading with charge, spending an average of US$378,000 on art and antiques - which is over three times the expenditures of Gen X and boomer collectors.

Overall spending across the generations jumped 42 per cent from US$170,000 from the whole of 2020 to US$242,000 for H1 2021 alone - suggesting a broad-based return to spending across all age groups of collectors.

Digital sales rising

The pandemic has accelerated the adoption of digital platforms: Online channels accounted for 33 per cent of all dealers' sales - which is more than twice the figure for 2019.

It shows that many collectors are no longer averse to purchasing valuable art from websites, online viewing rooms, Instagram and even e-mail.

Not only that, digital artworks such as video works and non-fungible tokens (NFTs) are garnering more attention than ever. They now account for 12 per cent of the aggregate median spending by collectors in 2021, with the highest expenditure by millennials averaging US$20,000 in H1 2021.

However, the survey among art dealers showed that digital art sales accounted for less than 0.5 per cent of the value of sales in the primary market in 2021.

This indicates a significant portion of the activity in sales of NFTs related to digital art occurred outside of the gallery framework and in popular NFT platforms such as Foundation, SuperRare, Open Sea and Rarible.

Still, when presented with the choice of buying works through a dealer or gallery versus an online platform, 80 per cent of collectors preferred the personalised attention given by dealers to the anonymous nature of online transactions.

Women spending more

Besides the rising digitalisation of marketplaces, other major social trends impacting art buying include the push for greater representation of women across all spheres of life.

As the art world increasingly shines the spotlight on neglected women artists, women collectors are responding positively: Spending by women increased by a third to US$410,00 - which is double the spending of men, which stands at US$163,000.

Correspondingly, works by female artists are making up a bigger portion of art collections today: They now make up 42 per cent of all works, versus 39 per cent in 2020 and 37 per cent in 2019.

Another notable social trend impacting the market is sustainability: 77 per cent of collectors said they were mindful of such issues when it comes to purchasing art and managing their collection.

Looking ahead, 91 per cent of dealers estimated that their sales would either increase or remain stable over the next 12 months, with 9 per cent predicting a decline.

Thirty-seven per cent of dealers predicted greater net profitability in 2021 compared to 2020, with a further third predicting their profits would be stable.

Clare McAndrew, the cultural economist who authored the survey, said: "This research has uncovered some promising signs that some job losses have been recouped in 2021, along with indications of transformation within the industry that will continue to affect working practices in the future.

"The research also showed that, alongside the quality of the work and artists they offered, dealers are valued by collectors most for their knowledge and expertise as well as the long-term focus and trust built into their relationships."