New Peak of 2014 and Rapid Growth of Chinese Art Market
In 2014, the art market was marked by unprecedented activity: a record number (more than 100,000) of contemporary art lots were put up at auctions around the world, of which 64,000 (also a record) found their buyers, the global turnover of the contemporary art market increased in two years by $1 billion and reached $2.4 billion. This new peak was reflected in the art market as a whole, the annual turnover of which amounted to $16.4 billion.
China has begun to play a much more active role
The country has become increasingly attractive to global investors, including the auction house Christie’s, which decided to focus its sales in Shanghai. For its part, Sotheby’s has attempted to boost sales in Beijing. But the heart of the Asian market was Hong Kong, where works of art could enter without restrictions.
In 2014, Hong Kong accounted for 10% of the global auction turnover of contemporary art, this figure is still relevant today. Auction turnover at Christie’s and Sotheby’s in Hong Kong initially skyrocketed due to demand for Chinese artists, but this success soon spread to well-known Western artists. The total turnover of the contemporary art market in Hong Kong has increased over 10 years by 4200%: from $558 thousand in 2000 to $236 million in 2011. In 2016, the Phillips auction house also entered the Chinese market.
In 2019, these three auction houses accounted for 86% of Hong Kong’s total contemporary art auction turnover, with Sotheby’s clearly in the lead, accounting for half of the contemporary art auction turnover ($164.3 million). Today, Hong Kong, which accounts for 10% of the global turnover of contemporary art auctions, is the third platform for the sale of contemporary art after New York and London.
Pillars of the market
The big names of famous contemporary artists are what draw crowds to museums and give prestige to collections. Their works are estimated at tens of millions of dollars, so a significant part of the market interest is focused on them. In fact, three-quarters of the global auction turnover in the contemporary art segment is generated by just 100 artists out of 30,000 presented at auctions. In other words, the economic well-being of the contemporary art market depends on 0.3% of the artists represented on it.
Basquiat and Koons together account for 12% of global turnover. For 20 years, works by Basquiat, Koons, Hirst and Wool have been sold for $ 4.4 billion – this is almost 20% of the global turnover of the contemporary art market. Basquiat was the most sought after and most expensive contemporary artist as early as 2000. Since then, only the price level has changed.
An African-American artist from the Bronx, Basquiat has become a symbol of multiculturalism. Thirty years after his death, his work is still of great interest. He was to the contemporary art market what Picasso was to the modernist market, but that was not always the case. In 1988, his friends, collectors Lenore and Herbert Schorr, offered to donate the Basquiat painting to the Museum of Modern Art, New York, but the museum refused the gift.
The museum considered Basquiat “small”
And could not foresee the turning point, although one of his works – “Red Rabbit” (1982) – was sold in November 1988 at Sotheby’s for $ 100 thousand. His first millionth result was achieved after 10 years and it took another 10 years to reach the $10 million mark. 30 years after Basquiat’s death, the market pushed him to the $100 million mark.
With globalization and the growth of the number of wealthy people, the number of buyers of Basquiat’s work has increased dramatically, and the demand has become more diverse: his work bought by collectors from China, India, Russia, Europe, America and Japan – a record price for Basquiat’s work was paid by Japanese businessman Yusaku Maezawa.
Having exceeded the symbolic threshold of $100 million
Basquiat established his status as a market legend, just as Picasso had done before him. However, the markets of these artists have completely different structures: Basquiat, who died at the age of 27, created just under 3 thousand works, while Picasso is the author of tens of thousands. The scarcity factor played a leading role in the rise in prices for Basquiat’s works: since the period 1981-1982 is in the greatest demand, this further limits the supply.
Significant works by Basquiat regularly return to the market, and the increase in their value is impressive. For example, The Orange Sports Figure (1982) was resold three times: in the early 1990s for $66,000, in 2012 for $6.4 million, and in 2015 for $8.8 million. 5 million painting “Untitled” (1982) was bought in 1984 for $19,000 and resold 33 years later for 5,800 times more. In his most successful years, Basquiat literally dominated the contemporary art market: public sales of his works accounted for 15% of the global auction turnover.
Jeff Koons and the subjects of the new cult
Jeff Koons, a former Wall Street broker, created his first works in the 1980s. Koons invented luxury kitsch, an art that is both accessible and pretentious. Adored by some and loathed by others, the ambassador of American neo-pop art was recently voted the most expensive living artist with his sculpture Rabbit (1986) sold at Christie’s in 2019 for $91.1 million. At the heart of his such American success story expanding not only the methods of creating art, but also the ways of its distribution, where he shrewdly maneuvers between the spheres of art, production and business.