洋璽藝術創業計畫 - 政大學術集成

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(1)國立政治大學商學院國際經營管理英語碩士學位學程 International MBA Program College of Commerce National Chengchi University. 碩士論文政治. 大學 sit. y. Nat. 洋璽藝術創業計畫. ‧. ‧ 國. 立Master’s Thesis. n. al. er. io. Sello De Agua Art-Art Gallery Business Plan. Ch. engchi. i n U. v. Student: Sergio San Sebastian Chelala Advisor: Professor David Chang. 中華民國一○四年一月 January 2015.

(2) 洋璽藝術創業計畫 Sello De Agua Art-Art Gallery Business Plan. 研究生:齊始均. Student: Sergio San Sebastian Chelala. 指導教授:張大為. 政治大國立政治大學. 學. ‧ 國. 立. Advisor: David Chang. 商學院國際經營管理英語碩士學位學程. ‧. 碩士論文. er. io. sit. y. Nat. A Thesis. n. a to International MBA Program Submitted iv l C n U NationalhChengchi University engchi. in partial fulfillment of the Requirements for the degree of Master in Business Administration. 中華民國一○四年一月 January 2015.

(3) TABLE OF CONTENTS 1. Company Profile ...................................................................................................... 1 1.1. Mission................................................................................................................ 1 1.2. Vision .................................................................................................................. 2 1.3. Operation............................................................................................................. 2 1.4. Objectives of The Business ................................................................................. 2 1.5. Financial Goals ................................................................................................... 4 1.6. Start Up Funding ................................................................................................. 5. 政治大. 2. Market Faults ........................................................................................................... 6. 立. 3. Launching the Company to Help Eliminate the Pain ........................................... 9. ‧ 國. 學. 4. Launching the Company in the Right Moment .................................................. 10. ‧. 5. The Market and Target Audience: Taiwan, China and Asia Pacific Art Markets ....................................................................................................................... 13. y. Nat. io. sit. 5.1. Taiwan total available market ........................................................................... 13. n. al. er. 5.2. Taiwan Contemporary Art Market.................................................................... 15. Ch. i n U. v. 5.3. Taiwan Contemporary Foreign Art Market ...................................................... 16. engchi. 5.4. China Market .................................................................................................... 17 5.5. Consumer Behavior: Taiwanese and Chinese Consumption of Art ................. 19 5.6. Contemporary Asian Art ................................................................................... 21 5.7. Contemporary Foreign Western Art in Taiwan and China ............................... 22 5.8. Contemporary Latin America Artist in Taiwan and in China........................... 24 5.9. Prices in the Total Available Main Market ....................................................... 25 5.10. Prices in the Contemporary Art Market in Taiwan ......................................... 27 5.11. Prices of Contemporary Western Foreign Art in Taiwan ............................... 29 5.12. Prices of Contemporary Latin American Art in Taiwan ................................. 29 i.

(4) 5.13. Implications of High Prices ............................................................................ 30 5.14. Client Base ...................................................................................................... 31 5.15. Client base preferences ................................................................................... 35 5.16. Reaching Collectors ........................................................................................ 36 6. Competition ............................................................................................................ 38 6.1. Introduction ....................................................................................................... 38 6.2. Players in the Market ........................................................................................ 39 6.3. Auction Houses ................................................................................................. 40. 治政 6.5. Dealers focused in Latin America artists .......................................................... 42 大立 6.6. Entry Barriers for Dealers in the Available Market .......................................... 44 6.4. Local Galleries .................................................................................................. 40. ‧ 國. 學. 6.7. Entry Barriers for Foreign Dealers ................................................................... 45. ‧. 6.8. Business Model of Art in Taiwan ..................................................................... 47 6.9. Business Model in Dealers Focused in Western Artists ................................... 54. sit. y. Nat. io. er. 7. Product and Market Positioning .......................................................................... 56 7.1. Marketing Strategy............................................................................................ 58. al. n. v i n Ch U 8. Sello de Agua Art (洋璽藝術) Business 60 e n gModel c h i.................................................... 8.1. Customers Segments and Target Audience ...................................................... 60 8.2. Value Proposition.............................................................................................. 65 8.3. Customers Relations ......................................................................................... 67 8.4. Channels ............................................................................................................ 70 8.5. Key Activities ................................................................................................... 71 8.6. Key Partners and Resources.............................................................................. 73 8.7. Cost Structure.................................................................................................... 74 8.8. Revenue Model ................................................................................................. 75. ii.

(5) 9. Financials ............................................................................................................. 77 9.1. Revenue............................................................................................................. 77 9.2. Costs of Goods Sold.......................................................................................... 80 9.3. Selling, General and Administrative Expenses ................................................. 80 9.4. Profit and Loss Projection ................................................................................. 82 10. Conclusions ........................................................................................................... 85 11. References ............................................................................................................. 87. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. iii. i n U. v.

(6) List of Figures and Tables Table 1 Latin America Artists promoted in Taiwan (2013-2014) ......................... 24 Table 2 Average prices of art in several markets, 2012 (US$, $NT) ..................... 26 Table 3 Auctions sell above or below US$65,000 in 2012 ....................................... 27 Table 4 Prices range in Taipei in contemporary art, 2013 ..................................... 28 Table 5 Prices range in traditional art in Taipei, 2013 ........................................... 28 Table 6 Latin America Artists in Taipei Art Revolution 2014 .............................. 30. 政治大. Table 7 Groups of worldwide collectors according to its type ............................... 32. 立. Table 8 Taiwanese Collectors, 2014 ......................................................................... 34. ‧ 國. 學. Table 9 Art Sector in Taiwan Porter Five Forces ................................................... 39. ‧. Table 10 Criteria for Selection of Sello de Agua Art （洋璽藝術) artists ............ 64. y. Nat. sit. Table 11 The type of artists promoted by Sello de Agua Art （洋璽藝術 ) is. n. al. er. io. described in the table below .............................................................................. 66. Ch. i n U. v. Table 12 Forecast of volume promoted, year 1-10 .................................................. 78. engchi. Table 13 Forecast of volume and revenue promoted, year 1-10 ............................ 79 Table 14 Projected General administrative Expenses, 2015 .................................. 82 Table 15 Pro Forma IncomeStatemen-sello de agua art, (in thousands $US) ...... 82 Table 16 Pro Forma IncomeStatemen-sello de agua art, (in thousands $NT) ..... 83 Table 17 Projected Cash Flow, thousands US$ ....................................................... 84 Table 18 Projected Cash Flow, thousands US$ ....................................................... 84. iv.

(7) Figure 1 Objectives of the business. ........................................................................... 3 Figure 2 Yearly goals for the company ...................................................................... 3 Figure 3 Pains in the Taiwan and China art markets .............................................. 6 Figure 4 Solution given by the company entering the market. ................................ 9 Figure 5 Reasons to launch the company ................................................................ 11 Figure 6 Taiwan and China art markets. ................................................................ 13 Figure 7 Taiwan total available market ................................................................... 14. 政治大. Figure 8 Contemporary art, top ten countries by auction turnover market. 立. (2011/2012). ......................................................................................................... 15. ‧ 國. 學. Figure 9 Taiwan total serviceable market. .............................................................. 16. ‧. Figure 10 Taiwan value of imports of painting, NT$ million (2002-2012) ........... 16. Nat. sit. y. Figure 11 Taiwan total reachable market. .............................................................. 17. er. io. Figure 12 China total available market. .................................................................. 18. al. n. v i n Figure 13 China total serviceable 18 C hmarket................................................................ engchi U Figure 14 China total reachable market .................................................................. 19 Figure 15 Collectors preferences: local art .............................................................. 20 Figure 16.Collectors preferences: regional art ........................................................ 21 Figure 17 Collectors preference: western artists .................................................... 22 Figure 18 Client base: Taiwanese and Chinese art collectors characteristics ...... 32 Figure 19 Competitive forces in the art market in Taiwan and China ................. 38 Figure 20 Dealers in the market ............................................................................... 39 v.

(8) Figure 21 Galleries positioning in Taiwan and China ............................................ 41 Figure 22 Product offered. ........................................................................................ 56 Figure 23 Sello de Agua Art（洋璽藝術) product .................................................. 57 Figure 24 Marketing positioning. ............................................................................. 57 Figure 25 Location of the company in Taipei .......................................................... 59 Figure 26 Company business model. ........................................................................ 60 Figure 27 Criteria for selection of artists ................................................................. 65. 治政 Figure 28 Customer relationship characteristic...................................................... 68 大立 ‧ 國. 學. Figure 29 Customer relationship .............................................................................. 69 Figure 30 Key activities of the company .................................................................. 72. ‧. Figure 31 Internet web page of the company .......................................................... 73. sit. y. Nat. io. al. er. Figure 32 Key resources ............................................................................................ 73. v. n. Figure 33 Offices of the company ............................................................................. 75. Ch. engchi. vi. i n U.

(9) 1. Company Profile Sello de Agua Art （洋璽藝術) is a startup professional art gallery with the aim to promote Latin American art in Taiwan and China. The company chose Taiwan’s art market as a prime location for launch given its mature state with a size valued second in Asia, behind the art market of Mainland China. Being launched in Taiwan brings abundant opportunities and strategic advantages to reach Taiwanese collectors as well as other Asian art collectors such as Chinese,Japanese, Hongkonese and westerners living in Asia. In this growth, foreign artists (referring to those located outside Asia) are playing an important role because local and international dealers are promoting them to. 政治大 sustained in creating an ability to serve changing demands of art based on the increasing 立 number of emerging art collectors more open to western values and western ideas. differentiate themselves in the eyes of Taiwanese and Asian collectors. This trend is. ‧ 國. 學. In this process, it stands out that Latin American artists are specially under-represented. ‧. in the market. This does not reflect the general trend of Latin America art as it continues receiving gain in reputation and collection within the international art community. With. Nat. sit. y. its increased standing and the stage of the art market in Taiwan, introducing Latin. io. er. American Art will happen in the middle to long run, which will not only allow collectors to solidify their collections but also allow Latin America artists to expand. n. al. Ch. their careers through market expansion.. engchi. i n U. v. In this scenario there are several opportunities provided for art companies specializing in promoting Latin American art willing to come into the market and alleviate some needs within the art market.. 1.1. Mission Sello de Agua Art（洋璽藝術) mission is to be a respected, professional, and innovative art channel to bring to our clients, located in Taiwan and Asia Pacific, unique and valuable Latin American contemporary visual art, increasing the value in their appreciation of art and in their art collections, and expand markets for successful Latin American artists, through a extremely knowledgeable and professional process.. 1.

(10) 1.2. Vision “Close the gap between Latin America and Asia Pacific artist and art community with an engaging approach within participants in the company”.. 1.3. Operation The company is founded and registered in Taiwan and in Mexico in 2014 as a Limited liability company. With the inclusion of investors and Management Partners from both Taiwan and Mexico the ownership of the corporation will be shared among the shareholders. Sello de Agua Art（洋璽藝術) will operate with offices in both Mexico City and. 政治大. Taipei. This will help the company to be able to gain operative efficiencies, adaptability and competitive advantage. Mexico office will negotiate and look for artists in Mexico. 立. and in neighbor countries in Latin America.. ‧ 國. 學. In Taiwan the company will develop the connections with the local market and with the markets of Mainland China, as will be Beijing, Shanghai, and Hong Kong art. ‧. markets. In Taipei the company will have the main office and the warehouse and will. y. Nat. concentrate in the operation, promotion efforts and implementation of the sales strategy. io. sit. in Taiwan and Asia Pacific markets. From Taipei the company will also organize the. n. al. er. planning of fair participation locally and internationally and will develop the. i n U. v. partnerships with local dealers and agents in Taiwan, Mainland China and other markets in the region.. Ch. engchi. The fact of being in Taiwan will be leveraged to be able to introduce the artists into the market of Mainland China. Taiwan is close geographically and culturally to Mainland China, as well as has an important impact in the trends settled in China. Usually, artists that are successful in Taiwan can be so in China, as Chinese collectors are aware and give value of what is ocurring in Taiwan, as Taiwanese art colectors are recognized in China as knowledeable and wise. The experience accumulated in Taiwan facing local collectors can be transferible to dealing with Mainland Chinese collectors.. 1.4. Objectives of The Business. 2.

(11) Figure 1 Objectives of the business.. 立. 政治大. ‧. ‧ 國. 學 er. io. sit. y. Nat. al. n. v i n C h goals for the company Figure 2 Yearly engchi U. In the first year of operation: 1. Consolidate a diverse and valuable group of 8 represented artists from Mexico/Latin America to be promoted in Taiwan and in China through traditional channels and through the web site and social media. 2. Promote at least 5 artists through partnering with local dealers and fair participation in Taiwan and China tackling the initial barriers of entry. In this process organize at least 4 art exhibitions in Taiwan and 3 co-joint exhibitions in China.. 3.

(12) 3. Build a base of at least 10 collectors interested in Latin American Art in Taiwan and 10 collectors in China through exhibitions, events and lectures talking about Latin America art. In this process the increase in audience through social media and the use of information technology will be central and a key area to develop. 4. Sign partnerships with at least 4 local galleries/dealers and art agents in China, positioning the company as a trustful source of high aesthetic art coming from Latin America. 5. Create links with at least 10 to 15 key local, art foundations directors, directors of local art fairs, directors of cultural institutions and museums both in Taiwan and in China. 6. Participate in 4 local Art Fair in Taiwan and one international Art Fair in China.. 治政大 willing to be promoted in emerging to consolidated artists, from Latin America, 立 Asia.. 7. Serve as a valuable and professional channel for promotion and advise for. ‧ 國. 學. 1.5. Financial Goals. ‧. 1 year.  Achieve the promotion of at least 77 works in Taiwan of the represented artists, and. Nat. sit. y. 24 works in Mainland China, with a successful selling rate of 20%, achieving a sale. io. er. of 21 works. With averages prices of US$4,500 (NT$135,000) this figure will represent a revenue of US$ 77,000 (NT$2.1 million). In China 12 works will be sold. n. al. Ch. with a revenue of 27,000 US (NT$810,000). Year 2. engchi. i n U. v.  Increase the exhibitions organized in Taiwan and in China and the fair participation promoting more works. Thanks to a better understanding of the markets double the works sold both in Taiwan and China, reaching a revenue of US$226,800 (NT6.8 million)  After year 3 the company will focus to continue increasing the organization of exhibitions in both Taiwan and China and fair participation. The company will focus strongly in increasing the successful rate both in Taiwan and China markets, based in more knowledge about collectors preferences and building a market more educated. 4.

(13) to receive Latin American Art and better positioning and brand awareness with our collectors/partners.  After year 5 the goal is to the organize 10 exhibitions yearly (6 in Taiwan and 4 in China) and participate in 9 art fairs (4 in Taiwan and 5 in China and Asia Pacific). The number of exhibitions will be increased year by year to reach 14 in year 10 (7 in Taiwan and 7 in China), and a participation in 11 art fairs (4 in Taiwan and 7 in China and Asia Pacific).  The increase of the successful rate will also continue to be a key goal, increasing it year on year to end with a 50% in year 10 both in Taiwan and China. The average price of the works will also increase as bigger works will be promoted based in a stronger client base. The average price sold for the company will end in US$9,745. 政治大.  This will give the company a revenue in year 10 of US$1.7 million annually (NT$51. 立. million).. ‧ 國. 學. 1.6. Start Up Funding. The company initial investment will be US$250,000 (NT$4,500,000) which will be. ‧. allocated into different areas. Capital investment will be equal to US$100,000 (NT 3 million) and the rest for working capital for the first years of operation. Part of the. y. Nat. sit. resources will come from the founders and part from investors and loans. Some. er. io. resources will be used for working capital to develop the relation with the artists, and produce marketing materials as catalogs, paying salaries, fees for curators, and bare the. n. al. Ch. i n U. v. costs of operation as is rent. Another resources will be used mainly for the organization. engchi. of the exhibitions and fair participation.. 5.

(14) 2. Market Faults Taiwan’s visual art market has developed strongly in the last 35 years with growth in its value and size. The number of dealers, artists, collectors and public and private institutions working and interested in the visual art sector has flourished. There has been an increase in the professionalism and in the quantity of economic and human resources committed to the sector.1. 立. 政治大. ‧. ‧ 國. 學. Figure 3 Pains in the Taiwan and China art markets. sit. y. Nat. io. er. Nevertheless, Taiwan’s art market still faces pains to market actors. The first is the market remains relatively closed selling mainly local and regional artist. In this sense. n. al. i n U. v. Asian artists have still advantages, as most of the dealers promotes and sells mainly. Ch. engchi. Taiwanese and Asian artists. This market behavior diminishes the possibility of some diversification for local collectors and has shaped a market were local artists enjoy relatively high prices due to the lack of competition, making collectors over-pay overall diminishing the effectiveness of their investment.2. 1 Today more than 120 art galleries are in operation in Taiwan and relevant art fairs takes place each year in several cities as Taipei, Taichung, Tainan, Kaohsiung. Art Taipei being one of the oldest art fair in Asia. As well, several art auctions houses, local and foreign, participate in the Taiwan market. Private dealers and public initiatives are also all playing a strong role consolidating a mature and developed art market in Asia, just second in value behind Mainland China art market. Taiwanese art collectors have also become one of the main forces in Asia Pacific art circles, being know because of their purchase power, taste and knowledge about art. 2 The closeness of the market is not a consequence of trade barriers or non-tariff barriers to trade, as regulations, or special permits, but is the result of the preferences of art collectors, dealers and the weak of developed networks with other art realities.. 6.

(15) A second pain is the type of foreign art flowing to Taiwan. In the bracket of artists known as emerging to mature, important pains are still observed. In terms of the value of these artists and their art, questions and doubts arise. Some are coming to the market without an extremely strong internal and external value, but are promoted and sold as if they were artists with high internal and external value.3 Some of these artists enjoy a position in a relatively good price bracket compared to their real value, taking advantage of the higher prices available in the market. Taiwanese collectors are also overpaying for this art diminishing their investment, economic returns and enjoyment in the future. An extremely high concentration of western artists from Europe and the US is the third. 政治大. pain. This is happening because they are easier to promote and to leverage the positive perception of their value taking advantage of a positive “Country Brand Effect.” Local. 立. emerging novice collectors and art lovers are emotionally pushed to invest in these. ‧ 國. 學. artists.4 This closes opportunities to valuable foreign artists from other regions. In this arena, Latin American, African and Middle Eastern art and artists are especially. ‧. under-represented. This fact opens as well big questions. In the case of Latin American. y. Nat. art is seen in high end art circles as a flourishing art, extremely strong, unique and. n. al. Ch. er. io. opportunity causing increase in collection.5. sit. creative, still underpaid and sometimes undervalued, being an excellent investment. i n U. v. This trend in collecting Latin American art, nevertheless, is not occurring in Taiwan, which is a pain to collectors.. 6. engchi. Finally, there is the pain for Latin American artists. For. 3 According to research in the economies of the art sector, internal value of an artist is measured based in his/her special personality, creativity and originality in producing works of art. External value is measured in the development of the artist’s network of partners, supporters and colleagues, see Magnus Bruno Frederik Resch, Management of Art Galleries-Business Models. Dissertation, University of St.Gallen, School of Management, Economics, Law, Social Sciences and International Affairs, 2011. 4 This is pushed also because collectors have the perception that the art collected comes from “places were art must be valuable and is a safer investment” rather than based the artist value. According to Thompson (2008), in London and New York there are around 40,000 artists in each city. From that amount (80,000) 40% are vanity artists with no gallery representation and 41.5% are considered “poor dogs” selling thanks to their own promotion, without a gallery representation or supporters. This means that in the 2 most developed art sectors in the world 81% of all artists are considered with a low internal and external value. Some of these type of artists can be coming to Asia and Taiwan. The pain though comes that some are being promoted as if they were successful artists, being able to do it, based in the “positive country brand effect” and a lack of knowledge from some emerging collectors or art lovers and the marketing used by local or International dealers. 5 Relevant galleries in London and NY, as Gagosian and White Cube, have increased their efforts promoting Latin America artists and international power collectors, as the Deutsche Bank Art Foundation, are pushing Latin America art as one of their main areas to develop into the future based on their soundness and investment expected returns. This under-representation is the result of a complex scenario. On one hand in Taiwan there is the “Low brand effect of Latin America” as a whole as the knowledge about Latin America is still poor. This make that artists or art from this region has to compete with the “High brand effect of Europe and United States (US)” which is has not been easy. Collectors perceive US and European art to be more valuable and a safer investment so dealers also concentrate in this part of the market. Another cause is that there are higher barriers to introduce this artists, based also in weak. 7.

(16) them the main deterrent from Asia is related to the underdeveloped professional connections with art professionals, collectors and art lovers of the region, as well as the higher costs of promoting themselves as there exists larger geographical, language and cultural barriers. This is a big pain as Asia art markets are becoming more important in size and in value and will continue in doing so. In the near future those western artists not being promoted in Asia will miss opportunities of growth in their reputation and collection, as the art market is shifting from the West to the East.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. i n U. v. connections between Latin American artists and Asian dealers and the lack of knowledge of Latin America artists and dealers on how to approach Asian collectors.. 8.

(17) 3. Launching the Company to Help Eliminate the Pain Given the aforementioned market of challenges and pains, Sello de Agua Art（洋璽藝術) main value is to enter the market and promote in Taiwan and in China valuable visual contemporary art and successful artists coming from Latin America.. 立. 政治大. ‧ 國. 學. Figure 4 Solution given by the company entering the market.. ‧. This will help increase the value of Taiwanese art collections, the enjoyment of. y. Nat. collectors, and serve as new investment opportunities in the art sector. It will also open. n. al. er. io. promotion.. sit. a growing market for Latin America art through an effective and trustful channel of. Ch. i n U. v. The type of artists that will be promoted by Sello de Agua Art（洋璽藝術) will be the. engchi. key point in the value proposition and a solvent to collectors actual pains. Sello de Agua Art（洋璽藝術) will promote mature and emerging artists chosen with a high internal value and a developed external value. For Latin American artist the company will solve their lack of connections and knowledge about this growing art markets, helping them to expand their markets and enhancing their art careers.. 9.

(18) 4. Launching the Company in the Right Moment There are several reasons that open good opportunities for Sello de Agua Art （洋璽藝術) to come to the market in this moment. The first factor is the relevant shift in the art market, from West to East. Art sector, thanks to globalization and growth in international trade and economic wealth, has experienced a relevant trend in shifting from the mature and historical centers in the West, as London an New York, to emerging art markets in the East, such as Mainland China, Taiwan, Hong Kong, Korea and Singapore. Chinese and Taiwanese art markets exemplifies this trend perfectly. Mainland China has become the fastest growing art market in the world and in 2013 became the second. 政治大 concentrating more than 1% share in overall turnover of contemporary art in 2012. 立 Considering this figures, being launched in Taiwan art market will allow access to the in worldwide share in value. Taiwan is the fifth contemporary art market worldwide. ‧ 國. 學. fifth contemporary art market in the world and simultaneously makes reachable the access to Mainland China’s art market thanks to the near and convenient geographical. ‧. location between Taiwan and Mainland China, in addition to cultural similarities and. sit. y. Nat. current strong connections between Taiwanese and Chinese consumers.. er. io. The shift to East is also accompanied by a wider international development in these markets thanks to the introduction of foreign art. In the case of Mainland China 2013. n. al. Ch. i n U. v. imports of foreign art accounted for US$ 1 billion, two times the exports of art,. engchi. indicating Mainland China has become a relevant buyer of art. Comparatively, Taiwan imports of drawings have grown 12% annually from 2002 to date.7. 7 A relevant prove of this shift to the East is the strong strategy in China developed in recent years by Sotheby’s, one of the oldest art auction houses in the world. Sotheby’s has implemented a regional marketing initiatives such as the publishing of Hong Kong sales catalogues in Chinese, the launching of a Chinese language website that includes ecatalogues for sales of Asian Art and Sotheby's major Impressionist and Contemporary sales, and the hosting of innovative private selling exhibitions. They have continued investing in staff with the requisite skills to service Asian clients at Sotheby's Hong Kong, New York, and London locations, as well as to support the growth of the Chinese art market. In Hong Kong Sotheby’s added a state-of-the-art gallery with over 15,000 square feet for selling and exhibition space. Sotheby's Beijing was established in 2012 to provide Sotheby’s a platform for art-related auctions and private selling exhibitions in the art capital of China. See Sotheby’s form 10-K, 2013.. 10.

(19) Figure 5 Reasons to launch the company The second is that the sector In Taiwan and China is in a maturity and diversification stage pushed by foreign art as local dealers and international dealers are bringing art. 政治大 in Taiwan and in China since the beginning of the XXI century. Thanks to it Taiwanese 立. from the outside permanently or by participation in art fairs. This is a trend occurring. and Chinese art collectors and art lovers are becoming more sophisticated and. ‧ 國. 學. knowledgeable, demanding larger amount and more valuable foreign art in their own country. Following this trend and demand behavior marks the right moment to enter. ‧. the market offering valuable foreign art and new artists.. y. Nat. sit. A third factor is as we have noted already, Latin American art is under-represented in. al. er. io. Taiwan, even though has received special attention and is being collected in high-end. n. art circles worldwide, a trend not occurring yet in Taiwan. In this sense, Taiwan art. Ch. i n U. v. market is behind other art markets in the world, even Asian art markets such as. engchi. Mainland China, Hong Kong, Korea and Singapore, were Latin American Art is already being promoted. Coming into the Taiwanese market offering valuable Latin American art in this moment serves a need not yet served and will create a first mover advantage, being able to develop brand awareness with Taiwanese collectors (public and private), art institutions, and gain a special place in the Taiwanese market providing future leverage. It will also provide leverage with artist selection, being able to bring valuable artists much of which are not being promoted seriously and in a permanent basis in Taiwan and in Asia.. 11.

(20) The fourth4 factor is the greater wealth accumulation in Asia Pacific. In the Asia Pacific region there are approximately 2.4 million (m) high net worth individuals (HNWI) being just behind North America and Europe. The total wealth in this class in the Asia Pacific is considered to be US7.37 trillions. In terms of growth, the Asia-Pacific HNWI population and wealth continues a long trend of outperforming. Since 2007, AsiaPacific has increased its HNWI population by 31% and its wealth by 27%, well in excess of the rest of the world increases of 14% and 9%, respectively. Most of them are located in Japan (1.9 m), Mainland China (643,000), Australia (207,000), Hong Kong (114,000), South Korea (160,000), Taiwan (95k) and Thailand (73,000).8 In Taiwan the HNWI population has increased at a 13% annual compound rate since. 政治大. 2008 with HNWI are expected to increase to 120,000 by 2015, a 26% increase from 2012. In Mainland China this class grew by 14% in 2012 and is expected to continue. 立. growing.9. ‧ 國. 學. Finally, investments in passion items, is a big trend in wealthy Asia-Pacific individuals. According to the consumer attitude of HNWI, luxury good consumption in this group. ‧. is increasing year on year. In 2014 is expected that consumption in luxury goods in this. y. Nat. group worldwide will increase in 36%. Inside the consumption of luxury goods,. n. al. Ch. er. io. of HNWI are becoming more interested in collecting art.. sit. investments in passion items is a growing area of HNWI spending activity, were 44%. i n U. v. In Mainland China, according to art economics, HNWI individuals are allocating 17%. engchi. of their total investments to passion items, as is art. In Taiwan this figure should be transferable according to similar behaviors between both communities. In this sense, the markets where the company will operate, are increasing its fondness to collect and make investment on passion items, such as art. Based on these circumstances and behaviors entering into the market gives relevant opportunities to grow and establish itself in an environment of expansion in the target class and in a type of product, such as art, being demanded with more fondness.. 8 Bar, Julius. Wealth Report: Asia, June 2013. 9 Ibidem.. 12.

(21) 5. The Market and Target Audience: Taiwan, China and Asia Pacific Art Markets. 立. 政治大. Figure 6 Taiwan and China art markets.. ‧ 國. 學. Sello de Agua Art（洋璽藝術) will operate to capture the art markets located in the. ‧. Asia Pacific region from its main headquarters in Taipei. The company will focus to. sit. y. Nat. enter FIRST the Taiwan and China art markets, particularly penetrating Taipei, Tainan. io. er. and Kaohsiung in Taiwan and Beijing, Shanghai and Hong Kong art markets in China,. al. v i n Ch of demand for visual art and a consolidated e n gartcecosystem h i U where several dealers, artists, n. as these represent growing markets in terms of size and maturity, with relevant levels. framers, auction houses, museums and art fairs and art initiatives exist. In a second phase the company will focus to penetrate other markets as that of Korea and Singapore as they are important factors in the development of the art market in the region. Cities as Seoul and Singapore will be in the targeted markets of Sello de Agua Art（洋璽藝術) through partnerships and fair participation.. 5.1. Taiwan total available market10. 10 A big part of the information related to the Market in Taiwan comes from a market research made in Taipei. For building this analysis 30 galleries in Taipei (50%) were visited. We assisted to more than 10 openings and interviews with some artists and museum officials. The market research tries to include the opinion expressed by dealers, gallery. 13.

(22) Figure 7 Taiwan total available market. 立. 政治大. According to its value, Taiwan’s market, in Asia, is only behind Mainland China. In. ‧ 國. 學. 2012, according to arteconomics Taiwan art market accounted to 1% of the global market value for postwar and contemporary art traded through auctions.11 Based on this. ‧. data, in 2012 its size, depending on the estimates, could have reached between US$196 to US$285 million (M) (NT$5,800 M and NT$8,565 M).12 These figures make it bigger. sit. y. Nat. in value than Singapore, South Korea or Japan art markets. The 1% share is above European markets as Sweden (0.5%) and Austria (0.5%) and is very similar to the share. io. n. al. er. of Germany (1.1%) and Italy (1.1%).13. Ch. engchi. i n U. v. staff, gallery owners, as well as some collectors and artist agents. This market research also includes data from important reports as the TEFAF and art economics data, and data collected trough fairs and research as Art Taipei 2013, Art Revolution Taipei 2014 and Art Solo 2014. The report also considers information gathered through participation in art Taipei conferences, talks and events. 11 Taiwan fine art market is still unknown in the west mainly as a result of being shadowed by seemingly larger markets such as Mainland China, Hong Kong and Singapore, but its size is important. 12 This figures are estimated following this criteria. The postwar and contemporary art in the world had a total global value of US$6,167 million. Taiwan has 1%, meaning Taiwan accounts for around US61.7 million. Artprice in the other hand estimated that in 2012 the contemporary art in Taiwan market was equal to 45% of the Taiwanese market. This means the total market could reach US$137 millions. But this is just the size considering the auctions. If the sales through auctions in Taiwan behaves as the average in the world, and accounts to 48% of the total sales in Taiwan, then the total market considering the dealers, would be around US286 million. If this is not the case and the auctions accounts to figures similar as in Mainland China (70%) which is the market were the auction houses have the biggest participation and can be a good benchmark for Taiwan, then the total market in Taiwan would be around US$196 million. 13 Is true that in Asia (China and Taiwan) collectors tend to overbuy art through auction houses compared to European collectors, nevertheless, this figure give us a understanding were the Taiwanese markets stands in the world compared to other art markets.. 14.

(23) 5.2. Taiwan Contemporary Art Market. Figure 8 Contemporary art, top ten countries by auction turnover market (2011/2012).. 治政大45% of the total market, with The contemporary art market in Taiwan represents around 立 an estimated value between US$88 M to US$128 M a year (NT$2,640 M –NT$3,840 Source: Art price, 2011.. ‧ 國. 學. M). This figure however in Taiwan can have important volatility because there has been years where the contemporary art market reached 65% of the market. According to. ‧. Artprice, the contemporary art market in Taiwan was, in 2011/12, the fifth in the world with 1.36% of the world total turnover.14. n. er. io. sit. y. Nat. al. Ch. engchi. i n U. v. 14 This size is just behind China (38.8%), US (26.10%), UK (22.6%) and France (2.4%) and above art markets as Germany (0.86%), Italy (0.70%), Turkey (0.74%), United Arab Emirates (0.61%), and Singapore (0.70%).. 15.

(24) Figure 9 Taiwan total serviceable market.. 政治大. 5.3. Taiwan Contemporary Foreign Art Market. 立. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. i n U. v. Figure 10 Taiwan value of imports of painting, NT$ million (2002-2012) Source: World Bank.. As we have noted, contemporary foreign art has been raising in Taiwan with bigger offers in the market. Nevertheless, in terms of market share and size, there are not clear figures. The only data available are value of imports of paintings coming to Taiwan. According to this data, 2012 imports of paintings and drawings made by hand to Taiwan were equivalent to US$15 M (NT$390 M), with an average of US$17.9 M (NT$537 M). 16.

(25) annually of imports since 2008, with a peak in 2009 of US$32.3 M (NT$972 M).15 From these imports not all should be contemporary art. If we consider the percentage of contemporary art in the Taiwan art market, average imports should be in around US$8 M (NT$241 M), which remains a small market.16. 政治大. 立. Figure 11 Taiwan total reachable market.. ‧ 國. 學. Import figures, however do not include sculpture, which is an important mean in. ‧. Taiwan and also is imported in relatively good amounts. Another factor to consider is that there could be an important quantity of art coming to Taiwan not being declared as. Nat. sit. y. art, coming to the country marked as “just for exhibition”. Usually in this case there is. io. al. n. 5.4. China Market. er. a low value declared in customs.. Ch. engchi. i n U. v. China art market over the last 10 years has been the strongest growing in the world, and the most important in the emerging markets, both in terms of size of the domestic sales and in the international significance of its buyers.17 According to McAndrew's (2013) its emergence on the global art scene, since 2005 has fundamentally altered the structure of the international art trade, and it has been the most important of all the newer art markets.. 15 World International Trade System, (WITS), World Bank. 16 Another way to estimate it is if we consider the percentage of imports in Taiwan similar to that of Mainland China being 10% of the market. This would mean a market size for foreign art between US$18 M to US$28 M, with a size in contemporary art that would be between US$9 M (NT$270 M) to US$12 M (NT 360 M), a size comparable with the data on imports. 17 McAndrew,Claire.TEFAF Art Market Report, 2013.The Global Art Market with a focus on China and Brazil. Arteconomics. The European Fine Art Foundation, pp 97.. 17.

(26) Figure 12 China total available market.. 治政大 auction houses data, having The size in 2013 accounted to US$8.5 billion, coming from 立 of US$12 billion annually, 26% of the total art market a value, according to estimates, ‧ 國. 學. in the world, just behind the US art market. There are more than 6,000 dealers in China and the market is expected to continue growing into the future consolidating itself in. ‧. the top 2 markets in the world.. n. er. io. sit. y. Nat. al. Ch. engchi. i n U. v. Figure 13 China total serviceable market. In China, the modern and contemporary art market accounts to around 20%, reaching an estimate of around US$1.6 billion.18 This figure is also very volatile and can change significantly year on year depending on what happens in the supply and demand in the. 18 Ibidem. 18.

(27) contemporary art and in the Chinese art and antiques. Nevertheless, it’s size is in the top 3 in the world and estimates indicate will continue growing into the next years. In China imports of art are estimated in around US$1.0 billion annually growing importantly in the last 10 years, as several important dealers from the West are opening art spaces and galleries in Beijing, Hong Kong and Shanghai. The growth in the general demand of art in China has attracted the increase in art fairs as is exemplified by the opening in 2010 of the Art Basel Hong Kong fair, which indicates that the big art actors in the contemporary art are coming to China.. 立. 政治大. ‧ 國. 學 ‧. Figure 14 China total reachable market. sit. y. Nat. io. er. 5.5. Consumer Behavior: Taiwanese and Chinese Consumption of Art Most of the Taiwan art market promotes and sells mainly Taiwanese artists. The local. n. al. Ch. i n U. v. artists promoted range from masters of XX century considered modern art, to mature. engchi. and well-established artists, to mid career and emerging artists in the contemporary art. Some local artists, both masters and contemporary artists, are known in foreign markets while some of them are only known in Taiwan. Painting by different means (oil, acrylic, crayon, ink) is the most common type of art seen in Taiwan but there exists a big development and interest in sculpture. Photography, mix media, video and installation are gaining popularity and importance but are still beneath painting and sculpture. Photography represents today around 5% of the market.19. 19 The size of the photography market represents the opinion of important art dealers in Taiwan.. 19.

(28) Figure 15 Collectors preferences: local art In terms of the subjects, there is a big enjoyment of themes as human body, nature,. 政治大 known as shanshui and calligraphy. Usually Taiwanese art collectors and art lovers 立 prefer to collect a type of art that resembles the beautiful side of life rather than the sad animals and abstract subjects, as well as traditional Chinese themes as landscape,. ‧ 國. 學. or darker part of human existence.. ‧. In China the market is extremely concentrated in selling and promoting Chinese art and. Nat. io. sit. works in ink are also very important in the Chinese art market.. y. antiques, which represent almost 68% of all the market. From this field calligraphy and. er. Nevertheless, China has been one of the leading forces in the development of. al. n. v i n C Chinese artists selling at very highhprices, i U and outside China. In this e n gboth c hinternally. contemporary artists coming from the Asia Pacific region, having a big increase in. sense, the market, as happens in Taiwan, is made in a big percentage by emerging, mid career and consolidated local artists, which control the market, mainly in the case of the art market located in Beijing, where local artists have a strong influence in the market.. 20.

(29) 5.6. Contemporary Asian Art. Figure 16.Collectors preferences: regional art. 治政 and collected are Asian artists, mainly contemporary大 Chinese and Japanese artists. 立 These artists range from emerging, middle career to consolidated, high-end artists and. In regards to the contemporary foreign artists, in Taiwan, the most common represented. ‧ 國. 學. superstars, who, with no doubt control the market for foreign art in Taiwan. These artists are found working in paintings (oil, acrylic), new ink, and prints and in sculpture.. ‧. In the case of Chinese contemporary artists, the high end or “superstar” are sold in prints. 20 Other highly recognized artists are also promoted with original works. 21. Nat. sit. y. Chinese artists are so accepted, that some dealers are specialized in selling only them.22. al. er. io. They have gained a share of the Taiwanese market as Taiwanese dealers are well. n. connected with Mainland Chinese dealers, art agents and artists.. Ch. engchi. i n U. v. In the case of Japanese artists, the majority is seen in the contemporary art and remains extremely popular in Taiwan. Some superstars can be seen in prints.23 Korean artists are also gaining participation in the market. 24 Artists from Thailand, India or Hong Kong are also promoted but remain within the emerging field or with smaller participation.. 20 As is the case of Wang Guan Yi, Zhang Xio Gang or Zheng Hao. 21 As Xu Bing, Cai Guo Qiang and Hong Ling, 22 For example, works from artists as Yin Jun, Zheng Hong Zhang, Guo Fei, Li Chun Hai, Luo Jie, Yin Jun, He Sen, Qui Jie, Zhong Biao. 23 The Japanese artist Yayao Kusama, is the most seen Japanese artists with several art galleries in Taiwan promoting her work. Most of her prints are being re-sold in a secondary market. Another important Japanese artist seen in Taiwan is Takashi Murakami, who actually owned an art gallery in Taipei. Other artists in sculpture are Katsura Funakoshi, Shimazaki Tatsuya, Yotsumoto Takaaki, Yoshida Atsushi, and others can be seen in photography such as Yamamoto Masao. 24 As is of artists such as Je Baak and Kim Yeon, Kwon Ki and Kang Suk-Hyun.. 21.

(30) In China, most of the foreign art is concentrated in Hong Kong and Shanghai where there is a strong focus in art coming from several origins. In the case of the Asian artists in China, Taiwanese artists are well collected, as they are connected with their tradition and their prices are still available compared to the Chinese super stars. Japanese artist nevertheless do not represent a strong force as is in the case of Taiwan because of political and historical reasons. Artists from the South East Asia are also present and have increase its interest.. 5.7. Contemporary Foreign Western Art in Taiwan and China. 立. 政治大. ‧. ‧ 國. 學 y. Nat. er. io. sit. Figure 17 Collectors preference: western artists. al. v i n C h from Latin America, the US with a small percentage coming e n g c h i U the Middle East or Africa. n. From the western arts, the most commonly promoted in galleries are from Europe and. Nevertheless, through art fairs more western artists are coming from diversified places, as some foreign galleries bring them. Most of the western artists seen in galleries are in painting, sculpture and photography, and vary from emerging to more mature artists, but western superstars are not seen. The type of artist will depend on the type of gallery. Some of these artists are mature but not represented by Alpha or Beta Galleries abroad, so their value remains in the middle ranges. 25 As we have noted before, in general. 25 Examples can be Dorina Mocan (Romania-Sweden). Artists placed in the emerging fields are also seen as Michael Sistig and Amely Spötzl from Germany. 22.

(31) foreign western artists in the area of painting, cannot be considered extremely consolidated in their internal and external value being an important pain in the market. Several examples of artists promoted in Taiwan in painting prove this statement. The most recognized valuable western artists promoted and collected in Taiwan are concentrated in the field of sculpture. Some of these artists are more consolidated.26 In China in recent years there is a big emphasis in artists from the west, as the big dealers from UK and US have come to the market. That’s why in China, on the contrary to Taiwan, more western super stars are promoted, mainly in the Hong Kong art market, thanks to the participation of the big international galleries. This is also happening in. 政治大 The majority of western artists, outside sculpture, come mainly through participation 立 Shanghai and less in Beijing.. in art fairs, with works in painting and sculpture but also increasing number in. ‧ 國. 學. photography. As noted before, a big percentage of them should be considered in the emerging or mature but not superstars. Nevertheless, there are exceptions of dealers. ‧. coming to the fairs, mainly to “Art Taipei”, with relatively famous western artists. Some. sit. y. Nat. perform well in Taiwan.27. al. er. io. The impact of western artists in the market and the acceptance from local collectors is. n. still difficult to measure in terms of market share or success rate with data available.. Ch. i n U. v. Considering, as a benchmark, the figures collected in “Art Revolution Taipei 2014”,. engchi. we can have some rough idea. In this fair, for example, the number of works exhibited from this group of western artists in the fair was around 154, a small proportion of the entire works exhibited in the art fair. According to data gathered, from them, around 36% (56) were sold during the 4 days of the fair representing a successful rate of less than 50%. The distribution of success nevertheless was wide. Some artists were not collected but others were very successful. From 24 artists among the group, 13 could 26 One example is UK sculpturer Tony Cragg and Belgium artist Wim Delvoye, or American sculpture Peter Woytuk. These 3 artists should be considered well known and with considerable internal and external value, but not superstars. Some famous former Russian artist are also seen in Taipei galleries, as Vladimir Chayanov, Vladimir Vassine or Shebeka. As mentioned before foreign artists are sold in a smaller proportion and only by a small group of dealers. 27 The art fair Art Revolution 2014 exemplifies this fact and is a good representation of how the market for foreign artists is today. In this fair there were around 30 western artists promoted. From them almost 63% were from Europe and from them a big amount (29% of total) came from Spain. Latin America artists represented a surprisingly 17% almost double from US artists and Middle East artists which can indicate an important trend. As noted before none of these artists are superstars and even not represented by important galleries in their own home countries. From the group of Spanish artists coming to Art Revolution 2014, just “Alex Alemany” has already gain a place in the Arts.. 23.

(32) not sell any works (more than 50% of artist), while 11 could sell with quite success. If we only consider the successful artists, 60% of their works exhibited were sold during the fair (56/94) which is a relatively good acceptance rate. According to the nationality from the most successful, 70% were from Europe. These European artists had the highest success rate, above 60%. Some even sold all their works exhibited. From Latin American artists their success rate was 36%.28. 5.8. Contemporary Latin America Artist in Taiwan and in China From Latin America there are very few examples of artists being promoted in Taiwan through galleries. Through investigation we could discover a Chilean artist being promoted by a foreign dealer. Another dealer promotes the very well known Cuban. 政治大. artist Abelardo Morell, who works in photography.29. 立. Is through fairs nevertheless, that more Latin America artists have come to Taiwan. In. ‧ 國. 學. “Art Taipei 2013” the Mexican Gallery, Puerta Roja, based in Hong Kong, brought pieces of 2 Mexican artists in the emerging and mature but not entirely recognized fields.. ‧. Five months later, in “Art Revolution Taipei 2014” there were four Latin America artists promoted in the fair. One each from Chile, Peru, Argentina and Mexico. In 2014,. y. Nat. sit. Sello de Agua Art（洋璽藝術) promoted and presented 3 Mexican artist through. n. al. er. io. exhibitions and fair participation. Latin American artists seen in Taiwan are listed above.. Ch. engchi. i n U. v. Table 1 Latin America Artists promoted in Taiwan (2013-2014) Artist Sergio Martinez Jose de la Barra. Chile Peru. Country. Born/Age 1966 (48) 1956 (58). Sergio Cechi. Argentina. 1975 (39). Eva Vale Claudia Perez Pavon* Alex Dorsfman* Daniela Edburg* Theo Marmolejo. Mexico Mexico Mexico Mexico-US Ecuador. 1983 (31) 1967 (47) 1977 (37) 1975 (39) 1986 (28). Source: Own research in Taipei. *Artists promoted by Sello de Agua Art（洋璽藝術).. 28 One artist from Latin America (Argentina) had a 100% success rate (4/4) while other success rate was much lower. Artists from Middle East were not capable of selling in that fair. 29 Abelardo Morell is considered with high internal and external value being in a very respected position in the field of photography worldwide.. 24.

(33) The impact in collectors of Latin American art is also difficult to know at this point in time. According to the dealer of the Hong Kong based Mexican gallery, in “Art Taipei 2013” she could not realize any sales during the fair. During “Art Revolution Taipei 2014” from the four Latin America artists attended with an aggregate amount of 21 works, gathered data speculates that only 38% of the total works were sold. As noted before this success rate was lower than in the case of European artists in that same fair. According to our experience in organizing exhibitions and fair participation, the sales were difficult to make in this point on time. According to some data from knowledgeable people in the field, this relatively low number of Latin America Artist do not indicate there is no interest in collectors.. 政治大 interview with him, that Latin American Art is not able to find to many collectors in 立. Mr.Shih, Director of the Economic Research Center for the Arts, expressed in an. Taiwan not because there is no interest but because they are not knowledgeable, so. ‧ 國. 學. promotion efforts are harder. According to him there could be an important potential in promoting them because there are very few dealers doing so, and collectors can be. ‧. interested. Acording to imports of paintings, foreign art market in Taiwan represents. y. Nat. around 2% to 4% of the total available. Considering Latin American art can represent. sit. a market share of 10% of this foreign art market, annual sales of Latin American art. al. n. Taiwan.. er. io. can reach between US$800,000 to US$1.5 M (NT$24-NT$30 NT M) annually in. Ch. engchi. i n U. v. Latin American art in China is way more developed than in Taiwan, with some dealers focusing in developing the channels for Latin American art, as are the galleries Bandi Trazos and Puerta Roja. If the 10% of the imports of art in the contemporary field goes to Latin America, sales in this segment could reach a value of US$20 million (NT$600 million).. 5.9. Prices in the Total Available Main Market Taiwan average art price per work sold is among the highest in the world. This is an accurate representation of the relative good size of the Taiwanese market in terms of value and turnover compared to the size of the quantity traded. The reason of the high prices in the art market in Taiwan is not clear with the data gathered, but we guess is a consequence that an important part of the Taiwanese art collectors come from the IT 25.

(34) industry. Much of them are billionaires that have a high inclination to collect Taiwanese artists considered national heroes. Speculation in the market can also be another reason of the high average price. In 2012 according to art economics in the postwar and contemporary art the average price in Taiwan was US$96,767 (NT$2.9 million) which is a very high figure just behind the average prices in UK and US (US$117,721 and US$98,281) which indicates the relevant position of Taiwan respect to this indicator.30 Comparing to other mature markets this average price is extremely high, is almost 2 times that in China, almost 8 times that in the Japan market, and 5 times that in France. According to the world average is almost 7 times higher (see table).31. 治政大 2012 (US$, $NT) Table 2 Average prices of art in several markets, 立. Japan. al. n. Taiwan. io. Italy. Sweden Austria Rest of the World. 2,757,534. 46,211. 1,386,333. 1.96. 110,100. 3,302,988. 19,555. 586,638. 8,900. 266,994. 6,887. 206,622. 90,502. 2,715,063. 0.82. y. 4.63. sit. Germany. Nat. France. 91,918. Taiwan price /country price 0.98. er. United Kingdom. NT$. ‧. China. ‧ 國. United States. US$. 學. Country. v 11,739 352,170 i n C11,898 h e n g c h356,928 i U. 10.17 13.14 1.00 7.71 7.61. 12,958. 388,752. 6.98. 13,192. 395,772. 6.86. Source: Arteconomics (2013), with data of Artnet and own calculations.. Data about auction prices in Taiwan confirms these same characteristics. In 2012, 85.6% of total sales by auction were above a price of US$65,000, a figure just behind UK (89.7%) and US (88.9%) but above China (81.1%), France (65.2%) Japan (39.4%), and the world average 81.2%.32. 30 Arteconomics (2013) with data of artnet. See McAndrew, Claire, “TEFAF Art Market Report, the global art market with focus in China and Brazil”, 2013, p45. 31 Own calculations with data from arteconomics (2013). 32 Arteconomics, 2013.. 26.

(35) Table 3 Auctions sell above or below US$65,000 in 2012 Country United States China United Kingdow France Germany Italy Taiwan Japan Sweden Austria Rest of the world World. Value grater than US$65,000. Value less than US$65,000. 88.9% 81.1% 89.7% 65.2% 49.3% 46.2% 85.6% 39.4% 55.3% 45.2% 61.3% 81.2%. 11.1% 18.9% 10.3% 34.8% 50.7% 53.8% 14.4% 60.6% 44.7% 54.8% 38.7% 18.8%. 政治大 In 2012 Taiwan volume of transactions of the global post war and contemporary art 立 market accounted for 0.5% compared to 1% in terms of value. This is a characteristic Source: Arteconomics (2013), with data of Artnet and own calculations.. 33. ‧ 國. 學. explained by the high level of prices, only seen in mature markets, as United Kingdom, United Stated and China, markets with also high average prices.. ‧. China in the other hand has also high prices with an average of US$46,211 which is. y. er. io. sit. as a reference).. Nat. several times the average price in European markets as Germany or France (see table 3. n. al 5.10. Prices in the Contemporary Art Market ini vTaiwan Ch. n U engchi. High prices in the market are also present in contemporary art. Art galleries sell a large percentage of paintings in oil and acrylic between the ranges of US$10,000 (NT$300,000) to US$16,000 (NT$480,000) for contemporary Taiwanese artists not yet completely consolidated. This range in price are above the average price that art economics registers for the postwar and contemporary art in markets like Japan, Sweden, Austria, Italy, Germany, and the rest of the world (not considering the top 10 markets).. 33 Ibidem, see arteconomics (2013).. 27.

(36) Table 4 Prices range in Taipei in contemporary art, 2013 Type of Taiwanese artist Consolidated Mature (not entirely consolidated) Emerging. Low bracket price US$50,000 (NT$ 1.5 M) US$10,000 (NT$300,000). High bracket price US$135,000 (NT 4M) US$16,000 (NT$480,000). US$1,333 (NT$ 40,000). US$3,000 (NT$ 90,000). Source: collected in Taipei Galleries and Art Fairs.. Prices for more consolidated postwar and contemporary Taiwanese artists in painting found in Taipei are in the range between US$50,000 to US135,000 (NT$1.5 M to NT$4 M), a value that historically is considered high. The price depends on the size, artist, medium and dealer. Small works from emerging Taiwanese artists were valued in the range between. 政治大 these price levels were less frequent in the market. In general, Taipei art galleries in the 立 minimum bracket for painting start mainly from US$7,000-US$10,000 (around US$1,333 (NT$40,000), US$2,166 (NT$65,000 ), US$3,000 (and NT$90,000 ), but. ‧ 國. 學. NT$160,000, NT$200,000 to NT$300,000), no matter the artist and the mean.. ‧. Table 5 Prices range in traditional art in Taipei, 2013. y. er. io. Source: collected in Taipei Galleries and Art Fairs.. High bracket price US$4,300 (NT$130,000) US$233,000 (NT$7 M). sit. Low bracket price US$4,000 (NT$120,000) US$133,000 (NT$4 M). Nat. Type of Taiwanese artist Ink on paper Oil. al. n. v i n C hworks on paper, seen of work and size. Prices for small e n g c h i U in this medium were in the range of US$4,000-US$4,300 (NT$120,000-NT$130,000) for relatively consolidated. For traditional works on ink and paper the prices are also dependent on the artist, type. artists.34 Traditional consolidated artists in oil though, mainly Chinese and Taiwanese, are selling for prices ranging from US$133,000 to US$233,000 (NT$4 M to US$7 M). Sculpture, a mean that is very popular in Taiwan with several artists displayed, the prices start above US$10,000 (NT$300,000), for small pieces, and can rise to US$70,000 (above NT$2 M,) for relatively small pieces from consolidated Taiwanese artists. A lot of examples of sculptures from local artists are sold between US$16,666US$30,000 (NT$500,000 to NT$900,000). Sculptures from local consolidated artists can be above US$150,000, (NT$5 million) for big pieces, as was the case of works of. 34 One example is the artist Wu Ping.. 28.

(37) Ju Ming, who is a very consolidated local artist promoted in high scale sculpture delivered for public spaces.. 5.11. Prices of Contemporary Western Foreign Art in Taiwan In general, the prices for western artists have a smaller range than for local or Asian artists (Chinese, Japanese, Korean). They have similar levels than local artists in the entry price brackets, with a big amount selling between US$3,000 to US$16,000 (NT$90,000-NT$480,000). However, is difficult that prices can go above US$30,000 (NT$900,000), which also indicates very consolidated and “superstars” are not promoted in Taiwan. Actually, only just a small amount, outside sculpture, is selling above US$16,000, a. 政治大 are lower than for locals. Nevertheless, in sculpture, prices in foreign artists can rise 立 price easily seen for Taiwanese middle-value artists indicating prices for western artist. ‧ 國. 學. above US$30,000 (NT$900,000) and even above US$100,000 (NT$3 M). During “Art Revolution Taipei 2014” the average price for 30 Western artists displayed,. ‧. was US$7,962 (NT$238,860), with the maximum price at US$30,000 (NT$900,000). In this data, the lower prices for Western artists is confirmed, there were selling in. y. Nat. n. al. er. io. gathered at that same fair, around US$19,823 (NT$594,690).. sit. almost 2.5 times less If we compare with the average price for local and Asian artists. Ch. i n U. v. A good estimate of the average price for a western artist and a good entry price is the. engchi. results from the Russian designer and painter Jeni Bev Biktimirova, one of the most successful western artists in the “Art Revolution Taipei 2014”. During the fair she sold 12 works with an average price of US$8,000 (NT$240,000) for works on ink and paper size 55 x 75 cm. Her prices are equal to the average price seen in foreign western artist in the same fair, which indicates is a price that can be very accepted and paid for a foreign artist relatively unknown. She enjoys a big acceptance in Taiwan based on the momentum after she won in 2013 the prize for the best foreign artist in that same art fair.. 5.12. Prices of Contemporary Latin American Art in Taiwan From Latin America there is not to many data to make soundable conclusions. But if we take the “Art Revolution Taipei 2014” as a benchmark, there were 4 artists in the 29.

(38) fair with prices relatively at the same level of prices for European artists in the painting field considering size. The average price seen for them is listed below. The price range was from US2,333 (NT$70,000) to US$13,083 (NT$392,500). Two of them were below the average price of foreign artist of US$8,000 (NT$240,000) while one above. Table 6 Latin America Artists in Taipei Art Revolution 2014 Artist. Sergio Martinez Jose de Barra Eva Vale. Average Price US$. Average Price NT$. $13,083. Mean. Average Size (cm). $392,500. Oil painting 110x94 in canvas la $6,667 $200,000 Oil painting 113 x 100 in canvas $2,333 $70,000 Watercolor 28 x 26 In Lego Source: with price information gathered at Art Taipei Art Revolution.. Average Price per cm 1.28. Works in Fair. $0.59. 4. $3.21. 1. 4. 政治大 In “Art Taipei 2013”, the Hong Kong based Mexican gallery Puerta Roja offered prices 立. in the range between US$4,000-US$40,000 (NT$120,000 to NT$1.2 M), with some. ‧ 國. 學. works offered in US$8,333 (NT$250,000) which is the entry price bracket commonly seen for foreign artists in the market.. ‧. 5.13. Implications of High Prices. y. Nat. sit. There are several implications for this level of prices. For one side opens good. er. io. opportunities for dealers and artists participating in a market that values and pays for. al. v i n is confirmed after gathering information C h in TaiwaneseUgalleries. engchi n. art. It indicates Taiwan has a mature market with collectors willing to invest in art. This. Nevertheless, the high art prices represent a market with high entry barriers and relatively low competition from foreign artists. Through human surveys we discovered that high prices also indicates local collector’s preference to buy local, consolidated and mature artists, regardless of price levels because there exists a strong national sentiment in Taiwan and a special taste for Taiwanese or Chinese art. Also important collectors seek to support the development of local artist. As auction mechanism is very important to prices, prices are alsothe result of speculative behavior. These price levels also represent a cultural attitude in the art sector and among respected collectors being persuaded by dealers to increase their profitability. Art in Taiwan has to be priced relatively high historically because art galleries are considered as luxury 30.

(39) high end places to shop. The price is seen as an indicator of its value and the reputation of the artist. If a dealer prices an artist too low originally this will harm the reputation of both the dealer and artist in the eyes of collectors which are already expecting high prices. There is the idea in the market that lower prices do not necessarily represent quality work, so the initial price is set quite high. This is different from other art markets where valuable emerging artists can be found in prices affordable to collectors in their initial stage. Another aspect is that for Taiwanese collectors it appears that prices in the range of US$6,666 to US$10,000 (NT$200,000 to NT$300,000) are not considered high, indicating a good level in their purchasing power. In this price bracket it also appears. 政治大. that collectors are mainly art lovers, not pushed by investment decisions but more by decorative intentions, cultural, social recognition and emotional attitudes and the. 立. willingness to support local art. This entry bracket is below the average price in Taiwan. ‧ 國. 學. but is similar to the average art prices for markets as Japan, Germany, Italy, Sweden, Austria, so is not a low price bracket.. ‧. The ratio of value in the market and the quantity of pieces sold, as well as the high. y. Nat. average price in Taiwan, also indicates that the market tend to trade expensive pieces. sit. of art in low quantities, probably indicating that the concentration of the total value. n. al. er. io. should be done in a relatively small number of artists and dealers, the most recognized.. i n U. v. This should make harder the entry for emerging artists as well as for foreign artists.. 5.14. Client Base. Ch. engchi. In Taiwan there is a relevant affection of collecting art. According to the industry it comes from both the Japanese colonial period education and from the long Chinese heritage of enjoying and valuing art. This behavior solidifies after the economic growth and the accumulation of wealth in Taiwanese economy, mainly after 1985. Today, according to data of Christie’s in Hong Kong, around 30% of their clients collecting Asian art are from Taiwan. Local collectors are known as being well informed, liberal and highly influential and consolidated in Asia.. 31.

(40) Figure 18 Client base: Taiwanese and Chinese art collectors characteristics. 治政大in the market. Collectors are Having a good collectors base is a critical positive factor 立 the most relevant player next to the artists (Boll, 2009), as they establish the market 35. ‧ 國. 學. introducing money and have a powerful impact on the success of the artist. Worldwide there are usually 4 types of collectors according to their needs such as demographic,. ‧. economic and social status, purchase behavior, personality and lifestyle. These groups are: art connoisseur, art lover, investor and dealer-collector.. sit. y. Nat. io. al. Demographic. Art connoisseur (social need seeker and symbolic needs seeker).. Late 20s over.. Art Lover (emotional needs seeker, cultural needs seeker).. Late 30s over.. n. Category. and. and. er. Table 7 Groups of worldwide collectors according to its type. v ni. Economic and social status Highly educated and high income.. Purchase behavior Irregular attendance to openings Little or no purchase record.. Highly educated and high income.. Irregular-high attendance Regular buyer.. Ch. engchi U. Personality and Lifestyle Uncertainty and little experience with the art market. Enjoys reputation that comes with it. No Trading ambition or impact on prices No Exchange with artist, only through gallery. Keep artwork until death. Old school type of collector. Motive: love art, inspiration, altruistic, Collection exchange with artists, tries to establish a connection. Impact on price or market. Loans artworks to museums to educate the public.. 35 Frederik, Magnus. Management of Art Galleries-Business Models. University of. St.Gallen School of Management, 2011. pp 75.. 32.