What Is An Emerging Art Market?
We are all aware of the world's art capitals, such as New York, London, and, as of more recent, Hong Kong. These three cities are constantly making headlines for being the place where multimillion-dollar art transactions take place. But have you ever wondered what goes on in other countries around the world, where art sales don't make international headlines? Is there even an art marketplace in cities outside the art capitals and, better yet, outside the major world economies? Well, the simple answer is: Yes! The more complex answer is that art markets have stages of development, and it all depends on their location in the world. Like world economies, the art market also has classifications ranging from "developing" to "developed." In this article, I will discuss what an emerging art market is and how to know where in the world it exists.
What is it?
"Emerging art market" refers to a marketplace in a geographical region where the art infrastructure has some characteristics of a developed art market, but it is not fully developed yet. For example, a country may have cities with art galleries, auction houses, but perhaps not many local buyers to financially support art production. What differentiates a developed art market from an emerging one are the following:
A strong artistic community
Great art institutions
A robust commercial sector
A large number of regional and international collectors
In addition, as an emerging art market progresses, it typically becomes more integrated with the global art commerce ecosystem as it increases its trade volume and there is more liquidity.
Despite globalization, art commerce remains heavily concentrated in the art capitals mentioned above because the countries in which these cities exist have leading world economies. The US has the largest economy globally, China comes in second place, and the UK is in sixth. When we compare the world economies with art markets, we can see that a nation's economy correlates with the size of its art market. Of course, that is not always the case, but it is more often than not. Therefore, the art market correlation with economies makes complete sense. Let me explain, when you don't have to worry about your essential needs, and you are doing well financially, that is when you have leisure time to enjoy culture and the money to spend on luxury items.
According to Art Basel and UBS's Art Market 2021 report, global sales of art and antiquities reached an estimated $50.1 billion in 2020. From that total, the US has the largest market with a share of 42%, while Greater China and the UK come in second place, with each being responsible for 20% of global sales. So as we can see, countries with leading economies have leading art markets. So if we go by this, then we will be able to see emerging art markets in countries with emerging economies. While the three leading art markets together make up 82% of the world's art sales, emerging art markets make a mere 7%, as shown in the Art Economics graph below. But knowing that art markets grow with economies, we can assume that this graph will look very different in a decade from now as the emerging world economies will have a chance to become developed.
Where is it?
The best way to search for emerging art markets is to look at world economic reports. Throughout the years, economists have created acronyms to group the top emerging economies, such as BRICS and MINT, to predict countries with strong growth that will provide high returns for investors over the long term. BRICS was initially created in 2001 by British economist Jim O'Neill, and the group was composed of the five major emerging countries: Brazil, Russia, India, China, and South Africa. The MINT countries consist of Mexico, Indonesia, Nigeria, and Turkey, and this acronym was coined in 2014 by Fidelity Investment. BRICS is a bit outdated now, but looking at it, we can see that China was a remarkable prediction. As mentioned above, China currently has the world's second-largest economy and, in all honesty, should be classified as a developed economy and not an emerging one (but that has everything to do with bureaucracy rather than with the stage of their economy). The other countries mentioned in both groups have had some stagnation due to political turmoil. Still, all have emerging art markets that are getting a lot of attention from the developed art market regions.
In Latin America, Mexico and Brazil have attractive art markets with a growing number of art fairs and art galleries, which signifies their increasing demands from regional and international art collectors. Even if you don't know anything about a country, looking to see its population size, economy, and social-political stability is a great way to recognize a potential emerging art market. Mexico and Brazil are great examples of this. Even though both nations have their ups and downs when it comes to stability, they both have large populations and economies, making them the ideal places for art markets to grow. Emerging art markets exist throughout the world, but only the top emerging economies have the potential to have established art markets, and these are the ones that will have a bigger pool of high-quality art and artists that will gain international recognition.
So there you have it, now you know what an emerging art market is and where to find one. I hope you enjoyed this article and use this information to explore art beyond the developed art markets and see the opportunities. Exploring emerging art markets allows us to meet new artists with different voices and perspectives to teach us new ways of seeing the world. And if you are a collector, regions with such markets can allow you to acquire high-quality art at much more affordable prices when compared to art from a developed art market.
Remember, we only see what we are shown and know what we are told; it is our responsibility to explore beyond that. So join us if you want to learn about specific emerging art markets. Upcoming articles will highlight each region individually so that you can make informed decisions when forming your art collection.