January 5, 2018 Yes Institute

The Indian and The Chinese Auction Market: A Comparative Survey

Author: Anica Mann-Kapur, Fellow, YES Culture, YES Global Institute

The Indian Art auction market made $98.1 million in total sales in the year 2016. With +0.5% growth in auction sales, the domestic market share domination remains at a conservative 59%. Comparatively the Chinese Art Auction market registered a sale of over $6.7 billion worldwide in the year 2016. One of the major reasons for this discrepancy remains the sheer number of auction houses in china as opposed to a handful in India. Indian auctioneers and art advisors recognize this gap, when a specialist such as Mallika Advani (Art advisor and Auctioneer) comments, “There is tremendous scope for local auction houses, provided you set some guidelines to work within. An auction is a great platform for both buyers and sellers, as it’s a public, transparent process, which offers them a level of comfort for determining pricing, as well as establishing authenticity for the works”.

Image Source: Arttactic South Asia Report 2017.

Sale values remain conservative as the variety of art that is offered remains focused on masters with very little spill over into contemporary and antiquities. Over the past couple of years several artists were featured in international museums, which although has become a matter of pride for the Indian art fraternity, however when compared to the Chinese representation, this international exposure falls short. It has become an urgent requirement for the Indian Art Market to diversify besides only banking in the masters. For the art market to become a recognizable contributor to the economy and India’s soft power it has become important for India to capitalize on its several market segments within Art. China’s market segregation can be gleaned from the diagram below which not only takes into account all sub-segments but devises national plans to promote and romanticize the artworks.

Market Share by Value (USD) by collecting category in China in 2016. 

 

Image Source: Global Chinese Art Auction Market Report 2016.

Market Share by Value (USD) by collecting category in India in 2016. 

Image Source: Arttactic South Asia Report 2017.

 

Chinese Domestic Sales vs. International Sales (Millions USD)

Image Source: Global Chinese Art Auction Market Report 2016.

So what creates this vast difference in market shares for two dominant Asian economic forces? If one can focus on one aspect that justifies market drive, then it has to be the policies that aid the ease of revenue flow.

It is indeed some basic changes included in the Chinese art market that fueled fantastic returns in terms of revenue. The first step to develop and strengthen the art market the authorities recognized the various models of selling art and enabled them to grow through legislation ensuring ease of transaction and focusing on better quality of collections and experiences.

Thus was formulated independently (by whom, Govt. of China?) ‘The China Association of Auctioneers (CAA)’ which is the only national association of the auction industry in China. (Global Chinese Art Auction Market Report 2016; artnet). Its functions include auctioneers administration, auction house regulation, industry supervision, business promotion, policy coordination, information services, and consulting. The CAA became committed to making every effort to promote the development of China’s auction industry and market. Presently in India there is no national association and few to none academic programs teaching the art market, or auctioneering.

In 1996, the Auction Law of the People’s Republic of China was issued under the advisement of CAA. As the first auction law in China, it promised standardization and stability within China’s growing auction industry. The success of a national authority for an auction house can be gleaned from CAA’s success, where they now command 80% market share, including the most well-known and prestigious auction houses in mainland China. In 1997, the CAA designated the first group of national certified auctioneers. In most countries around the world there is a lack of schools that teach auctioneering. An auctioneer needs much skill and panache in convincing a bid, especially when it is far greater than the last. As of 2017, it contains nearly 3,000 members including the most well known and prestigious auction houses in mainland China. For most auctions held in India, auctioneers are flown in from abroad. DAG Modern for all its auctions has invited and hosted an ex-Christies Auctioneer.

Studying the trajectory of CAA, one will understand with economic strength and a narrative to a discourse, a national organization often strays into governmental policy as a representational body of a larger market. CAA’s efforts were successfully legitimatized by China’s Ministry of Commerce issued the Standard for Auction of Cultural Relics and Art Works in 2010. Drafted by CAA, this document marked the beginning of the standardization of China’s art auction industry. Today, establishments are regulated by two national standards and five industry codes of practice.

A body that governs its plethora of affiliated organizations, not only uplifts their businesses, but also fosters a close check on the quality of lots that are selling. This action in the long run trickles down to the artist where art movements are cultivated. Standardization and a National Authority are one of those structural foundations that pave the way for new businesses to kick-start themselves, with a qualitative focus. Since 2012, the CAA has continued to promote standardization within the industry by vetting auction houses in mainland China based on the guidelines laid out in the Standard for Auction of Cultural Relics and Art Works, and emphasizing quality of lots sold over quantity. So far, 56 antiques and art auction houses have been certified as meeting the industry standard.

Given the scant and individual led auction landscape in India, some of the key concerns still remain – training, professionalism and art sensitization. India stands at the brink of awareness, where several private art programs, festivals and collections are opening up inviting public participation in understanding Indian Art History. However the skepticism in purchasing art still remains among the general populace as compared to buying jewelry. The field needs more professionalism, openness, and complete lack of personality driven businesses, which gives younger entrepreneurs confidence in exploring and re-vitalizing this landscape.