The negative impact of demonetization is fading, as galleries adopt a positive outlook towards sales. Whilst 46% of galleries said that demonetization had a negative impact on gallery sales in the last 12 months, only 27% of the galleries expected this to continue into 2018.

73% of galleries surveyed say the impact of Goods and Services Tax (GST) so far has been neutral to positive

Gallery Sales Trends 2017:

Majority of galleries saw positive sales growth in 2017: 59% of all the gallery respondents said that this year’s sales were up from 2016.

All of the younger galleries reported a positive increase in sales in 2017, with the large majority (80%) reporting sales increases between 10% and 20%. This could suggest that the conditions for younger galleries are improving.

Older galleries have diversified their business by focusing on a wider range of collecting categories: Among the younger galleries (less than 5 years old), the average allocation to Contemporary art was 72.5%. This was significantly higher than the older galleries which had an average allocation to Contemporary art of 58.9%, followed by 42.6% for Modern Art, and 20.9% to Classical Indian art.

Strong reliance on the domestic market: The majority of galleries are heavily dependent on the domestic market, with 69% of galleries seeing 70% or more of their sales derived from domestic buyers.

Established galleries have been actively nurturing international collectors: Older galleries have built up an international collector base, allowing them to significantly increase the average price of sales, and diversify their customer base.

Art fairs an important sales channel for younger galleries as a platform to cultivate and source new buyers: Art fairs generate an average of 18.8% of the annual sales for these galleries, and were the third most important sales channel for the galleries surveyed. Overall, 64.7% of galleries said that art fairs remained a very effective channel to findings new art buyers.

The physical gallery space remains the most important sales channel, accounting for an average of 46.6% of South Asian gallery sales. 64.9% of galleries say that the gallery space remains the most important channel for finding and engaging new buyers.

Online sales playing an increasingly important role in finding new buyers : With direct online sales accounting for an average of 15.7% of total gallery sales and indirect online sales accounting for an average 13.7% of sales. Overall, 54.5% of galleries said that online sales were the most effective channel of finding new art buyers.

79% of online clients are new to galleries in South Asia in 2017 , which shows that the online art market is an effective channel for galleries to capture, engage and build relationships with new clients.

Smaller galleries adopt low-cost social media strategy to win new customers: Smaller galleries are seeing 12.5% of their sales being generated by social media compared to 4.6% for the bigger galleries. Overall, 33.3% of galleries said that social media has become an effective tool in sourcing and engaging with new art collectors.

63% of galleries said their gallery model had changed in the last 10 years . These changes were primarily driven by the following factors: Adapting to a new commercial situation post-2009 downturn in the Indian art market, the advent of online art markets, social media and new technologies, changing buyer preferences and increasing competition from auction houses.

Art Tactic revealed the 2n dedition of the South Asian Art Market Report 2018 in partnership with Rawlinson & Hunter and W/R/B Underwriting.

This year’s edition is primarily focused on the South Asian gallery sector, particularly looking at sales levels, average prices, analysis of different sales channels, including art fairs and online sales. The survey conducted among galleries also highlights some of the key challenges facing the sector and suggestions for how these challenges might be addressed. The report presents a unique insight into a sector, where very little pre-existing data exists, and offers an alternative view of the South Asian art market seen through the eyes of the galleries.

This year’s report presents a unique insight into a sector, where very little pre-existing data exists, and offers an alternative view of the South Asian art market seen through the eyes of the galleries.

-Compiled by Mariam Nihal