LSE Public Lecture: Emerging Art Markets
Speaker: Melanie Gerlis
Date: November 8, 2011
Host: LSE Film and Audio Team / Breeze Little Gallery
Episode Overview
This lecture features Melanie Gerlis, art market editor and seasoned analyst, in conversation with Henry Little and Josephine Breeze of Breeze Little Gallery. The event explores the phenomenon of "emerging art markets," examining regions experiencing rapid shifts in art buying, institutional infrastructure, and global influence—including China, Russia, India, the Middle East, Latin America, and more. With clear-eyed analysis and lively anecdotes, Gerlis dissects both the opportunities and pitfalls these new markets bring to the global art ecosystem.
Key Discussion Points & Insights
1. Why Do Emerging Buyers Matter? [03:29]
- Gerlis sets the tone by highlighting that emerging buyers are vital because established markets (US, UK, Western Europe) have plateaued or waned.
- “It’s not a particularly strong, happy, supported art market in the countries that have been strong... Countries such as China, Russia, the Emirates... [give] a little bit of an extra kick to the art market.” (03:29)
- Cites a high-profile Alma Tadema painting auctioned with fierce bidding from China, Russia, and the Middle East; the Chinese buyer won at a record price.
- Demonstrates how non-Western buyers are now driving top-tier demand and prices.
2. State of the Global Market & Market Mechanics [07:00]
- The art market is sizable (~$50 billion peak in 2007 per Clare McAndrew), yet volatile and still relatively unregulated compared to other industries.
- Half of market value comes via dealers, not just auction houses.
- Art markets, contrary to some myths, do respond swiftly to global economic shifts, as illustrated by contraction after the 2008-09 financial crisis.
3. Defining ‘Emerging’ vs. ‘Developed’ Markets [10:50]
- A true art market depends on buyers, sellers, supporting infrastructure (galleries, fairs, museums), and minimal bureaucracy.
- “You need what I would call the mechanisms around that... underpinning all that, you hope in a developed market, is the validation you get from museums... and education.” (11:50)
- Tax, regulation, and government support are critical dividing lines.
Case Studies: Regional Deep Dives
4. China [14:30]
- China’s share of the global market skyrocketed from 5% to 23% in four years, overtaking the UK.
- Massive growth in auction houses and international ambitions—China now fields 9 of the top 20 auction houses globally.
- Robust art schools and a significant emphasis on supporting both historical and contemporary Chinese artists.
- Hong Kong highlighted as a unique hub: “It has all the qualities you want... it doesn’t have the taxes that China has. It doesn’t have the censorship. It is an international port.” (22:00)
- Issues: data reliability, prevalence of fakes, payment defaults, and political interference (e.g., Ai Weiwei case).
- Quote: “You don’t actually know that something is sold in a Chinese auction. Not for sure.” (28:30)
- Notable: high-profile cases of defaulted payments on major auction purchases and overall shaky regulatory structures.
5. Russia & Ukraine [32:05]
- Russia: Cloaked in national pride and immense private wealth (“We want our country to be the best. We want to put it top dog.” (33:00)), yet paradoxically lacking in domestic support for its own contemporary artists.
- Emphasis on trophy buying of Western art (e.g., Lucian Freud, Francis Bacon by Abramovich; football clubs—aesthetic and symbolic imports).
- “There is a taste for trophies... There is a need to buy the best and to show that they can buy the best.” (35:40)
- Nascent institutional structure; most collectors operate internationally rather than domestically.
- Ukraine’s Viktor Pinchuk cited as a case of effective art patronage—vast youth engagement in his art institution (60% visitors aged 16-30).
6. India [39:50]
- India expected to boom due to its millions of wealthy individuals, but the market remains more pragmatic and speculative—dominated by a phase of online auctions and the (failed) proliferation of art funds (2006-2008 bubble).
- “It’s not about… trophies… they want to make money on it. They don’t mind spending money if it’s worth something. It’s much more pragmatic, practical.” (41:20)
- Infrastructure limitations: scant public museums, limited national pride-driven collecting, most attention still focused on quick returns.
- Confidence has dropped sharply (-28% in ArtTactic index).
- International galleries quick to capitalize—often before Indian galleries can establish their own stars.
7. Middle East (UAE, Qatar, Dubai, Abu Dhabi) [45:47]
- Extravagant ambition: construction of “fantasy museums,” major acquisitions (Qatar as the largest global buyer of contemporary art).
- Remarkable role of women (e.g., Sheikha Mayassa in Qatar) as institutional leaders and collectors.
- Issues: overambitious timelines, correction in the auction market, questions about market sustainability.
- “Maybe they did too much too fast... announcing we’re going to build three of the best museums in the world in two years was a little ambitious.” (47:48)
8. Latin America [49:20]
- Not completely “new”; substantial tradition of art making and collecting.
- Brazil stands out: domestic market growing fast (reported 50% per year), strong museums, rising on the radar of international auction houses.
- Quote: “Brazil... that is the most important [Latin American] market... seems to have all the right ingredients to have a domestic market.” (50:25)
- Barriers: sky-high import taxes (36%), difficulty in establishing transparent values due to fragmented sales, dominance of private over public institutions.
- Mexico: Carlos Slim’s museum noted (but lightly mocked for taste); private sector leading development.
Notable Q&A Segments
Japan: The 1980s Bubble and Today’s Lessons [48:26]
- Q: Are there parallels between Japan’s rapid emergence and current China?
- A (Gerlis): “Japan... was a huge buyer in the 1980s and is always held responsible for the crash of the early 1990s. But I suspect what happened was a slight jumping too fast into the international markets before supporting their own. Whereas China has started by investing in its own heritage.”
- Draws a nuanced comparison—potential parallel risks for China.
Western Validation of Emerging Artists [54:34]
- Q: Does being exhibited in London give emerging market artists added prestige at home?
- A (Gerlis): “The London market and the New York market are trying very hard to be those arbiters of taste... but we don’t want to lose our ground. We can give some international recognition that other countries can't yet do… But we’re moving in quickly, so we’re not doing the markets any favors, I don’t think.”
Africa’s Prospects as an Art Market [57:06]
- Q: What’s the emerging state of the African continent in the art market?
- A (Gerlis): “There is a huge economic instability issue, but actually Africa is becoming a new point on the radar. The Tate has just appointed a curator of Africa art... There’s just a little bit of a groundswell.”
- Identifies South Africa and Nigeria as loci of growth.
Turkey & Korea [59:06]
- Turkey praised for recent dynamism, including Biennale; close to “graduating” from emerging to developed.
- Korea: Important buyers, maybe overlooked on the selling side. Gerlis recommends Ian Robertson’s recent book for further insights.
Youth/ Emerging Artists in the Downturn [62:06]
- Q: Are sales for younger/emerging artists down globally?
- A (Gerlis): “People have gone off slightly taking big risks on younger artists... The taste for both [youth and quick-return emerging markets] has fallen. So what people are courting now is not the artists, but the buyers. They want the people with the money more than the art.”
Memorable Quotes
- "It's not just about buying back and not selling; they have been selling, they're trading, and they want to open museums." — Melanie Gerlis on China [25:45]
- "The confidence... is down 28%. In six months, that’s a pretty big fall." — On the Indian art market [43:00]
- "Qatar is actually the biggest contemporary collector of art in the world. They’re doing it quite quietly." — On the Middle East [45:52]
- "Compared to some of the other emerging art, I think the art is the best [in Latin America]... Westerners like it because Latin America has a long tradition of Western trade." — On Latin America's appeal [52:20]
Timestamps for Key Segments
- 00:00 – Introduction by Henry Little
- 02:09 – Melanie Gerlis: Opening and main question—emerging buyers' importance
- 07:00 – The developed art market: size, volatility, and data discussion
- 10:50 – What makes a market ‘emerging’ vs. ‘developed’
- 14:30 – Deep dive: China’s meteoric rise and unique position
- 28:30 – Challenges facing China’s market (data, regulations)
- 32:05 – Russia: Trophy buying, brand culture, and lack of domestic support
- 39:50 – India: Speculation, art fund bubble, and infrastructure issues
- 45:47 – Middle East: Unprecedented museum projects and market correction
- 49:20 – Latin America: Tradition, growth, taxes, and billionaire collectors
- 48:26 – Q&A: Japan's bubble, global parallels
- 54:34 – Q&A: The role of Western validation for emerging market artists
- 57:06 – Q&A: Africa’s art market prospects
- 59:06 – Q&A: Turkey’s position
- 60:25 – Q&A: Korea’s market and collectors
- 62:06 – Q&A: Decline in appetite for emerging/young artists globally
Closing Thoughts
Melanie Gerlis concludes that emerging markets are essential to the survival and vitality of today’s art world, but face complex local and global challenges. Genuine infrastructure—domestic collecting, museums, and belief in homegrown artists—remains the critical foundation for long-term global influence. The lecture balances enthusiasm for new money and voices with realism about the structural and cultural hurdles ahead.