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1、ART MARKET REPORT2024BYARTS ECONOMICSTHE ART BASEL&UBSWelcome to The Art Baseland UBS Global Art Market Report 2024 by Arts EconomicsPublisherThis report is jointly published by Art Basel and UBSArt BaselMCH Swiss Exhibition(Basel)Ltd.Messeplatz 10,4005 Basel,SwitzerlandT+41 58 200 20 ,UBSUBS AG or

2、an affiliateBahnhofstrasse 45,8098 Zurich,SwitzerlandT+41 44 234 11 AuthorDr.Clare McAndrewArts EconomicsEditing Dr.Jeni Fulton and Lesley KilmurrayDesignSuperfieldDevelopmentDenken Studio2INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOKSection ContentsFigure ContentsAcknowledgementsFo

3、reword by Art Basel Foreword by UBS1.The Global Art Market 2023 Key Findings 1.1 Overview of Global Sales 1.2 Regional Market Performance 1.3 Online Sales 1.4 Art and NFTs Exhibit 1.Navigating a Sea of Instability Exhibit 2.The Legal Framework of Chinas Art Market 2.Dealers Key Findings 2.1 The Deal

4、er Sector in 20232.2 Dealer Sales2.3 Artist Representation2.4 Dealer Costs and Margins2.5 Buyers2.6 Sales Channels and Art Fairs2.7 Exhibitions and Fairs2.8 Online Sales and Strategies2.9 Dealer Challenges and Priorities4911131617202529333945525356637888991071151231293.Auction SalesKey Findings3.1 A

5、uction Sales in 2023 3.2 Top-Tier Auction Houses3.3 Mid-Tier Auction Houses3.4 Price Segmentation in Fine Art Auctions3.5 Fine Art Sectors3.6 Post-War and Contemporary Art3.7 Modern Art3.8 Impressionism and Post-Impressionism3.9 Old Masters and European Old MastersExhibit 3.The Outlook for the Chine

6、se Auction Market in 20244.Conclusions and OutlookKey Findings4.1 A Note on Wealth and Luxury Spending4.2 Outlook of the Art Trade in 2024 Appendix Economic Perspective from UBS Rights and Disclaimer1351361391461511571691741881962032152232242252302422532553INDEX INTRODUCTION1.THE ART MARKET2.DEALERS

7、3.AUCTIONS4.OUTLOOKFigure Contents1.The Global Art Market 20231.1 Sales in the Global Art Market 200920231.2 Annual Growth in Sales by Value in the Global Art Market 200920231.3 Global Art Market Share by Value in 20231.4 Global Art Market Share by Value of the US,UK,and China 201320231.5 Sales in t

8、he Major Art Markets 200920231.6 The Online Art and Antiques Market 20132023 1.7 Share of Online Sales in the Art Market versus General Retail 201920231.8 Share of Sales by Value of Collectibles Versus Art-Related NFTs 201920231.9 Sales of Art-Related NFTs 20192023 a)Value of Sales b)Average Prices1

9、.10 Annual Sales of Art and Collectibles NFTs 20192023 2.Dealers2.1 Geographical Distribution of Premises Operated by Dealers in 20232.2 Share of Total Number of Sectors Operated in by Dealers in 2023 2.3 Annual Sales Turnover of Survey Respondents in 20232.4 Dealers Number of Years in Business in 2

10、0232.5 Average Change in Year-on-Year Sales by Dealer Turnover Segment 202220232.6 Average Change in Sales by Dealer Turnover Segment 201920232.7 Level of Sales by Dealer Turnover Segment in 2023 versus 20192.8 Average Turnover of Dealers by Market Sector in 2022 and 20232.9 Average and Median Sales

11、 of Selected Art Sectors in 20232.10 Average Sales of Selected Art Sectors in 2022 versus 20232.11 Fine Art Dealers Share of the Value of Sales by Medium in 20232.12 Dealer Sales by Medium 202120232.13 Volume of Works Sold by Dealers 20222023 a)Average and Median Number by Price Bracket in 2023 b)Ch

12、ange in Average Number by Price Bracket 202220232.14 Volume of Sales by Price Bracket 202120232.15 Average Number of Artists Represented by Dealer Turnover Segment in 2022 and 20231621222526283032343637525859616265656669707172737576794INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOK2.1

13、6 Female Artist Representation and Sales,Selected Years 20182023 a)Share of Female Artists(from Dealers Total Number of Artists)b)Share of Sales of Female Artists2.17 Female Artist Representation and Sales by Gallery Turnover in 20232.18 Publications,Enquiries and Sales of Works by Female Artists On

14、line a)Share of Works Published,Enquiries to Galleries,and Auction Sales on Artsy 20162023 b)Growth of Published Works by Female Artists versus Enquiries on Artsy2.19 Sales Share of Top-Selling Artists Represented by Dealers a)In 2023 b)By Primary Market Dealers,Selected Years 201820232.20 Change in

15、 Dealer Profitability in 2023 versus 2022 a)All Dealers b)By Dealer Turnover2.21 Breakdown of Dealer Operating Costs 202120232.22 Change in Employment by Dealer Turnover Level from 2022 to 20232.23 Share of Dealers Externally Contracted Expenditure in 20232.24 Average Inventory to Sale Cycle,Selecte

16、d Years 201820232.25 Average Inventory to Sale Cycle by Dealer Turnover in 2022 versus 20232.26 Share of Dealer Sales by Inventory Source and Sector in 20232.27 Number of Unique Buyers 201920232.28 Main Source of New Buyers in 20232.29 Share of Dealer Sales to Buyer Groups by Purchase History in 202

17、32.30 Share of Dealer Sales by Buyer Type in 20232.31 Share of Sales to Local and International Buyers by Dealer Turnover in 2023 a)Private Collectors b)Museums2.32 Share of Dealer Sales by Value by Sales Channel a)In 2023 b)201920232.33 Share of Art Fair Sales from Total Sales by Dealer Turnover Se

18、gment a)Fair Sales in 2023 b)In-Person Events Only 201920232.34 Art Fair Sales Share Pre,Post,and During Events by Dealer Turnover in 20232.35 Average Number of Gallery Exhibitions by Level of Turnover 201920242.36 Art Fairs Held or Scheduled 201920242.37 Art Fairs Held or Planned by Region 20192024

19、(Live Events Only)2.38 Average Number of Art Fairs by Level of Turnover 201920242.39 Dealer Outlook for Art Fair Sales in 202482838587909193949597981001011021031051091111131151171181201215INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOK2.40 Dealer Share of Online Sales 201920232.41 Ave

20、rage Share of Dealer Sales Made Online by Level of Turnover in 20232.42 Share of Online Sales by Dealers by Buyer Category in 2023 a)All Dealers b)By Dealer Turnover2.43 Dealer Outlook for Online Sales in 20242.44 Average Discounts Offered by Dealers(on Artsy)202020232.45 Top Challenges for Dealers

21、in 2023/2024 and Next Five Years3.Auction Sales3.1 Global Auction Sales 201920233.2 Global Public Auction Sales by Value and Region in 20233.3 Settlement of Lots Over 10 million RMB($1.4 million)in 20 Mainland China Auction Houses 201120233.4 Change in Profitability of Mid-Tier Auction Houses in 202

22、3 versus 20223.5 Share of Total Sales by Sales Channel and Turnover(Mid-Tier Auction Houses)in 20233.6 Share of Sales by Mid-Tier Auction Houses to Buyers by Purchase History 202120233.7 Share of Lots Sold and Total Value at Global Fine Art Auctions by Price Bracket in 20233.8 Share of Lots Sold and

23、 Total Value at Global Fine Art Auctions by Medium and Price Bracket in 2023 a)By Value b)By Volume3.9 Growth of Sales by Value in Auction Price Segments 200920233.10 Inflation-Adjusted Change in Sales Values by Price Segment from 2009 to 2023Table 3.1 Annual Growth and Share of Auction Sales by Pri

24、ce Segment 20132023 a)By Value of Sales b)By Volume of Sales3.11 Market Share in Auction Price Segments 20092023 a)By Value b)By Volume(Number of Transactions)3.12 Market Share of the Fine Art Auction Market by Region and Price Segment in 2023 a)By Value b)By Volume(Number of Transactions)3.13 Marke

25、t Share by Value of the Fine Art Auction Market,Selected Years 200020231241251271281301331351411421441521531541581591611621641661681706INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOK3.14 Market Share by Sector of the Fine Art Auction Market in 2023 a)By Value b)By Volume(Number of Lot

26、s)3.15 Post-War and Contemporary Art Sales 201320233.16 Global Market Share of Post-War and Contemporary Art in 2023 a)By Value b)By Volume(Number of Transactions)3.17 Sales in the Post-War and Contemporary Sector Key Markets 200920233.18 Sales of Post-War versus Contemporary Art 201920233.19 Share

27、of Female Artists and their Share of Value among the Top 200 Artists by Sector in 20233.20 Sales by Price Bracket in the Post-War and Contemporary Sector in 2023 a)Post-War and Contemporary(Share of Value and Volume)b)Post-War versus Contemporary(Share of Value Within Sector)3.21 Sales of Works Crea

28、ted in the Last 20 Years in the Post-War and Contemporary Sector 201920233.22 Sales Over$1 Million in the Post-War and Contemporary Market by Subsector in 2023 a)By Value b)By Volume(Number of Lots)3.23 Modern Art Sales 201320233.24 Global Market Share of the Modern Art Sector in 2023 a)By Value b)B

29、y Volume(Number of Lots)3.25 Sales in the Modern Art Sector Key Markets 200920233.26 Sales in the Modern Art Sector by Price Bracket in 20233.27 Impressionist and Post-Impressionist Art Sales 201320233.28 Global Market Share of the Impressionist and Post-Impressionist Sector in 2023 a)By Value b)By

30、Volume(Number of Lots)3.29 Sales in the Impressionist and Post-Impressionist Sector Key Markets 200920233.30 Sales in the Impressionist and Post-Impressionist Sector by Price Bracket in 20233.31 Global Market Share of European Versus Other Old Masters by Value 201320233.32 Old Masters Painting Sales

31、 20132023 a)All Old Masters b)European Old Masters1721751761781791821831851861891921931941961992002012042067INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOKTable 3.2 Global Market Share of Old Master Paintings in 20233.33 Sales in the Old Masters Sector Key Markets 20092023 a)All Old M

32、asters b)European Old Masters3.34 Sales in the Old Masters Sector by Price Bracket in 2023 a)All Old Masters b)European Old Masters4.Conclusions and Outlook4.1 Global Billionaire Population and Wealth(December Totals 20082023)4.2 Dealer Views on Future Sales in 2024 a)Outlook by Dealer Turnover Segm

33、ent b)Outlook by Dealer Region c)Outlook for Own Sales versus Peers4.3 How Dealers Believe they Fared Relative to Global Peers in 2022 and 2023 a)In 2023 b)In 20224.4 Mid-Tier Auction House Views on Future Sales Versus Peers in 20244.5 How Mid-Tier Auction Houses Believe they Fared in 2022 and 2023

34、a)In 2023 b)In 2022AppendixFigure A1 Geographical Distribution of Respondents in 2024Figure A2 Share of Respondents by Reported Annual Turnover 201920232092102122232272322332352362382422462478INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOKAcknowledgements The Art Market 2024 presents

35、the findings of research on the global art and antiques market in 2023.The information presented in the report is based on data gathered and analyzed by Arts Economics()from dealers,auction houses,collectors,art fairs,art and financial databases,industry experts,and others involved in the art trade.

36、(The Appendix offers an outline of the main data sources used in the report.)One of the cornerstones of the research every year is the global survey of art and antique dealers.I would like to extend my sincerest thanks to all of the individual dealers who made this research possible by taking the ti

37、me to complete the survey.The survey is also supported by dealer associations around the world who distribute the survey to their members.I am very grateful for the support from all of the presidents and administrative staff of these associations who help with the distribution and encourage their me

38、mbers to take part.I would like to convey my gratitude to Miho Doi of The Agency For Cultural Affairs in Japan for help with the continued extension of our research in Asia.My many thanks also to Erika Bochereau of CINOA(Confederation Internationale des Negociants en Oeuvres dArt)for her long-standi

39、ng support,and to Art Basel for helping to distribute the survey to exhibitors.Im very thankful to Natasha Whiffen and the team at ArtLogic for also helping to widen the reach of the survey this year.My very special thanks also goes to those dealers who shared their valuable insights on the art mark

40、et directly with me through interviews and discussions during the year.Im indebted to the top-and second-tier auction houses that took part in the auction survey,and who offered their insights on the evolution of this sector over the year.Sincerest thanks also to Graham Smithson and Susan Miller(Chr

41、isties),Simon Hogg(Sothebys),Jason Schulman(Phillips),and Lucinda Bredin(Bonhams)for their help with compiling the top-tier auction data.Im very grateful to Liu Cong(劉聰),Director of International Cooperation at the Department of the Chinese Auctioneers Association,for her help and insights in resear

42、ching the Chinese auction market.And thanks to Tracy Xu and Jiali Duan from Artron for their continued support of the research and supplying results on the auction sector in China.The primary fine art auction data supplier for this report was Artory,and my thanks and appreciation goes to Nanne Dekki

43、ng along with the data team of Anna Bews,Benjamin Magilaner,and Praveer Kumar for their untiring support in putting together this very complex set of data.9INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOKI would like to thank Pauline Loeb-Obrenan from for giving us access to her compre

44、hensive database on art fairs and for her valuable insights on this sector.Sincerest thanks also to Ani Petrov and Alexander Forbes from Artsy for their help with compiling and analysing some fascinating data from their network of galleries,auction houses,and artists.Data on NFTs was supplied by NFT

45、 and I am very grateful to Gauthier Zuppinger for the data and insights.In addition,very special thanks to the expert authors who shared their invaluable perspectives in this report:Till Vere-Hodge at Payne Hicks Beach LLP and Katalin Andreides,Angell Xi at Jingtian&Gongcheng,Dr.Huang Jun,Dr.Zhang R

46、ui,and Xiaoming Zhang at W.Ming art.Finally,my many thanks to Noah Horowitz and the team at Art Basel for their help in editing and producing the report,and to Tamsin Selby and UBS for their continued support of this research.Dr.Clare McAndrew Arts Economics 10INDEX INTRODUCTION1.THE ART MARKET2.DEA

47、LERS3.AUCTIONS4.OUTLOOKForeword by Art Basel In 2023,the Chinese art market,constrained for several years due to COVID-19 restrictions,overtook the UK to become the second-largest market globally.Elsewhere,high inflation,economic volatility,and divisive conflicts in the Middle East and Ukraine cast

48、a pall on activity as fairs,auctions,and exhibition calendars reared back to pre-pandemic norms.The eighth edition of our landmark report,The Art Basel and UBS Global Art Market Report,authored by Dr.Clare McAndrew,Founder of Arts Economics and published in partnership with UBS,sheds light on these

49、complex developments as it reveals decisive trends and emergent tendencies within the global art business.The art market contracted last year after two consecutive years of growth,falling by 4%to an estimated$65 billion.This decline spanned both dealer and auction sectors,as sellers and buyers adjus

50、ted to evolving market conditions.Although down year-on-year,the market nevertheless remained above its pre-pandemic level of$64.4 billion,and fears of a broader correction in the fourth quarter were averted owing to resilience in the November marquee auctions in New York and a strong sequence of fa

51、ll fairs,including Art Basels second edition in Paris and the Miami Beach mainstay in December.The volume of sales increased in 2023,albeit principally at lower levels.Concomitantly,average sales for smaller dealers with a turnover of less than$500,000 expanded by 11%.In a sharp reversal of recent t

52、rends,the high end of the market,which has been driving sales since 2020,contracted in 2023,with the largest dealers with turnovers of over$10 million reporting average declines of 7%by value.These tendencies were reflected qualitatively as well,with a softening of frenzied speculative buying and mo

53、re value-and quality-conscious collectors setting the pace.Online sales also had a strong year,up by 7%,now accounting for a total of$11.8 billion,or 18%of the market bringing the digital component of the art market in line with other industries.This underlines how this segment of the art business i

54、s maturing,with dealers own websites being the preferred outlets for collectors to make their purchases.High-net-worth collectors surveyed last year by Arts Economics in collaboration with UBS are looking positively into 2024,with 77%of HNW collectors remaining optimistic about the market.11INDEX IN

55、TRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOK2024 will mark several highlights for Art Basel,including a return to a full-sized edition of our Hong Kong fair;exciting changes at our flagship Swiss edition,with new concepts and curators;a milestone expansion of our Parisian fair,as we occupy

56、 our new home in the renovated Grand Palais;and a first year in Miami Beach under new executive leadership.In line with this,art fairs remain the greatest source of new buyers for galleries underscoring the central role that fairs play in driving the market,and the immense responsibility we have as

57、fair organizers in staging the highest quality and most ambitious events possible in todays fast-evolving landscape.On behalf of Art Basel,I would like to thank Dr.Clare McAndrew once again for her extraordinary efforts in putting together this industry-leading study,as well as our counterparts at U

58、BS who have been exemplary partners and whose vital contributions continue to grow year by year.Lastly,an earnest thanks to the gallerists,art market professionals,and our global team,whose contributions make all of this possible.Noah HorowitzCEO,Art Basel12INDEX INTRODUCTION1.THE ART MARKET2.DEALER

59、S3.AUCTIONS4.OUTLOOKForeword by UBS The year 2023 saw the art market evolve against a backdrop of war,inflation,conflicting economic signals,and shifting consumer spending patterns,with notable variations across segments and geographies.But supported by financial markets and the enduring allure of a

60、rt,it proved to be a year of remarkable resilience.After two years of growth,sales in the art market eased 4%in 2023 to an estimated$65 billion,due in part to slower turnover at the high end of the market.But sales remained above pre-pandemic levels,due partly to continued growth in online sales,now

61、 representing 18%of turnover,almost double pre-pandemic levels.Digital innovations for viewing and buying art across web-based and mobile tools,as well as heightened engagement by galleries,auction houses,dealers,and collectors,point to the increasing importance of the digital sphere in generating n

62、ew opportunities.The Chinese market rallied against the overall trend to unseat the UK as the second-largest market.Activity surged as post-lockdown buyers snapped up backlogged auction inventories and as Hong Kongs major fairs and exhibitions returned to full-scale programming.Sales in China increa

63、sed by an astonishing 9%to an estimated$12.2 billion for the year.Resilience remains the dominant sentiment as we head into 2024.The strength of financial markets,expected declines in interest rates,and weakening inflation offer hope.Consumers themselves are also shifting away from goods purchases a

64、nd toward having fun namely consuming experiences and services centered on entertainment,leisure travel,and socializing.That bodes well for the art market.Significant numbers of new,young and ambitious collectors are entering the market,particularly in China,with events like art fairs forming a pipe

65、line of business for dealers and gallerists.Dealers and auction houses maintain a cautiously optimistic outlook for 2024,with over a third expecting sales growth.Only 16%of dealers predict a decline and a mere 4%of auction house respondents forecast a drop in auction sales.The composition and locati

66、on of growth in the global art market continues to change but arts long-term attraction as both a collectible and a medium of cultural expression remains a constant.We are proud that UBS has been the Lead Partner of Art Basel for 30 years,marking our commitment to artists,collectors,and the world of

67、 art.Going even further,we have also co-presented art market trends and insights since 2017,leveraging our position as a global 13INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOKleader in financial research and analysis.We hope that this publication serves as a valuable guide to the ar

68、t market today.Christl NovakovicHead UBS Global Wealth Management EMEA Chair of The UBS Art Board UBS,Global Lead Partner of Art Basel 14INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOKIMAGE Max Hooper Schneider,image courtesy of Art Basel 15INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3

69、.AUCTIONS4.OUTLOOK1.THE GLOBAL ART MARKET 202316INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOKKey Findings1.Following two years of growth,sales in the art market slowed in 2023,falling by 4%year-on-year to an estimated$65 billion.Against a backdrop of high interest rates,inflation,an

70、d political instability,sales were thinner at the top end of the market,and the performance of some of the major art markets diverged.Although they were down year-on-year,values remained above the pre-pandemic 2019 level of$64.4 billion.2.Despite the fall in value,the volume of transactions grew in

71、2023,increasing to 39.4 million(up by 4%on 2022),with the uplift driven by the relative buoyancy of transactions at lower price levels for both dealers and auction houses,and the pullback being mainly at the high end,where volumes tended to be lower.3.Both public auction and dealer sales decreased i

72、n 2023,although the decline in auctions was more severe,falling by 7%versus a 3%drop in dealer sales,and saved from a deeper contraction through the injection of postponed 2022 sales in China early in the year.Private sales at auction houses went against the declining trend,increasing by 2%year-on-y

73、ear.4.The US maintained its position as the leading market worldwide,accounting for 42%of sales by value,down by 3%year-on-year.China,including Mainland China and Hong Kong,became the second-largest global art market,with its share rising to 19%,while the UK fell back to third place with a share of

74、17%.France remained in a stable fourth position at 7%.5.After a robust recovery to reach a record high of$30.2 billion in 2022,the US market declined by 10%to$27.2 billion in 2023.The US remained the key center worldwide for sales of the highest-priced works of art,and while 2022 was a record year f

75、or high-end auction sales,the decline in 2023 reflected thinner trading at the top,leaving the market just below its level in 2019.17INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOK6.Sales in China rallied against the declining trend,increasing by 9%to an estimated$12.2 billion.As the

76、economy reopened in January 2023 following strict COVID-related lockdowns in 2022,there was a surge of activity in the art market in the first half of the year,with postponed auction inventories sold to enthusiastic post-lockdown buyers,while Hong Kongs major fairs and exhibitions returned to their

77、full-scale programs.The second half of the year was considerably slower,with projections of weaker economic growth and a persistent real estate slump weighing on demand and indicating that some of the outperformance in 2023 may have been driven by the unique reopening context.7.After showing much re

78、silience to intense economic and political pressures in 2021 and 2022,sales in the UK market fell by 8%to$10.9 billion in 2023.The UK is a key hub globally and within Europe for sales of the highest-priced works,and as these thinned out and imports of art to the UK declined,the market fell to 11%bel

79、ow its pre-pandemic level($12.2 billion in 2019).8.Following a strong recovery,with sales growth of 62%over 2021 and 2022,sales in the French market fell by 7%in 2023 to$4.6 billion,although remaining just above their level in 2019.There was mixed performance in the rest of Europe,and sales in the E

80、U fell by 2%to an estimated$8.6 billion.9.Online sales continued to grow despite the downturn in the market,reaching an estimated$11.8 billion in 2023,a rise of 7%from 2022.Although down from a peak in 2021 of$13.3 billion,sales remained almost double the level of 2019 or any year before that,and ac

81、counted for 18%of the markets total turnover.10.While there were many examples of transactions at high prices in online-only sales,the tendency for the most expensive works to be predominantly sold offline remained.Data from the fine art auction sector in 2023 showed that,like offline,the vast major

82、ity(over 95%)of transactions in online-only auctions were for prices of less than$50,000.However,unlike offline sales which were heavily dominated by value in the$1 million-plus segment,58%of the value of the online-only fine art auction market in 2023 was sales at prices of less than$50,000 and ove

83、r 85%was works sold for less than$250,000.18INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOK 11.From a peak of$2.9 billion in 2021,sales of art-related NFTs on NFT platforms outside the art market have declined for two years,reaching$1.2 billion in 2023,down by 51%year-on-year but stil

84、l over 60 times the size of the market in 2020($20 million).After outperforming art in 2022 to peak at almost$18 billion,the collectibles segment also saw a large fall in sales in 2023 to$6.3 billion,down by 64%year-on-year,with much of the purely speculative activity which has dominated these platf

85、orms losing momentum.Collectibles still made up the dominant share of sales by value,accounting for 84%of these two segments versus 16%for art-related NFTs.19INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOK1.1 Overview of Global SalesFollowing two years of growth,sales in the art marke

86、t slowed in 2023.A backdrop of increasing interest rates,stubbornly high inflation,wars,and political instability filtered down into more selective and cautious buying at the high end of the market,which had been pivotal to the revival of sales after the COVID-19 pandemic in 2021 and 2022.A divergen

87、ce in the performance in some of the largest markets created a more stable trajectory,but global sales still fell by 4%year-on-year to an estimated$65 billion.During the uniquely challenging operating context of the global pandemic in 2020,worldwide sales of art and antiques fell by 22%to$50.3 billi

88、on,their lowest point since the global financial crisis in 2009.The market recovered quickly in 2021,buoyed by strong post-lockdown demand,the return of live exhibitions and events,and healthy supply at the high end of the market.By the end of 2021,sales had reached$65.9 billion,an increase of 31%ye

89、ar-on-year,bringing the market higher than its pre-pandemic level in 2019.In 2022,growth continued,but at a slower and more uneven pace as regions and segments of the market began to diverge.The US market experienced one of the strongest recoveries up to this point,leading the major markets in terms

90、 of post-pandemic sales increases,while in China,continued lockdowns during 2022 stalled sales in the region,creating a negative counterpoint to global growth.Performance of market segments also differed,with the highest end of the market continuing to be the driver for growth,with many record sales

91、 during the year,while other parts of the market were flat or declining.In 2023,however,some of these key trends significantly changed direction.Regionally,sales slowed in the US and UK markets,which are home to some of the highest-priced sales worldwide,creating a drag on growth.In contrast,China w

92、as the only major market to show an uptick in value,as inventories from cancelled sales in the 2022 autumn auction season were sold in the first half of the year to eager post-lockdown buyers.Also,while there were still several notable multimillion-dollar sales worldwide during the year,the high end

93、 of the market was one of the weakest segments in terms of year-on-year growth in 2023,with lower-value sales showing more positive performance in both the auction and dealer sectors.Just as in 2022,continuing divergence in performance between regions and segments created more muted changes in sales

94、 figures,although reversing their direction versus the previous year.Nonetheless,while the decline in 2023 brought sales to a three-year low,values still remained 1%above the level the market had reached before the pandemic in 2019($64.4 billion).20INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIO

95、NS4.OUTLOOKDespite the fall in value,the volume of transactions grew year-on-year,increasing to 39.4 million(up by 4%on 2022).Transactions had fallen sharply by an estimated 23%to 31.4 million in 2020 during the pandemic,but increased by 19%in 2021,and again marginally by 1%in 2022 to 37.8 million.T

96、he uplift in 2023 was due to the relative buoyancy in the volume of transactions at lower price levels,for both dealers and auction houses.This again differentiates the performance of the market from some other slowdowns in previous years,when there tended to be fewer sales,with those at lower level

97、s taking the brunt of the decline as risk-averse buyers reverted to the high end or the often cited flight to quality.In 2023,however,the figures imply that some buyers were still keen to participate at lower levels,with the pullback being directed at the high end where volumes tended to be lower.Fi

98、gure 1.1 Sales in the Global Art Market 20092023 Arts Economics(2024)21INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOKFigure 1.2 Annual Growth in Sales by Value in the Global Art Market 20092023Arts Economics(2024)Rapidly escalating inflation and other economic concerns in different r

99、egions over the last two years have directly impacted the available discretionary income and subsequent spending for many collectors.Even for high-net-worth(HNW)collectors,who may have been less impacted by cost-of-living hikes,concerns over wealth creation and its stability affected their willingne

100、ss to make discretionary purchases and sales,while volatile social and political issues weighed on sentiment and distracted their focus from their collections.The rise in interest rates during 2023 led to much debate regarding the trickle-down effects on the art market and sales.On the one hand,some

101、 artists markets are less correlated with financial markets and can often be less affected by inflation and higher interest rates,which can make art attractive during uncertain periods.However,the significant and increasing proportion of HNW collectors that use credit or lending to make purchases fo

102、r their collections were also likely to factor in the effects of increasing rates on the directs costs for purchasing.Higher interest rates imply a higher opportunity cost for holding art,through forgoing a higher inflation-adjusted return on savings and investing money in art collections instead.1

103、1 See Spaenjers,C.(2023)Art Investing in Times of Inflation,in Arts Economics(2023)A Survey of Global Collecting in 2023,An Art Basel and UBS Report.Available at .22INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOKInflation and interest rates also had considerable implications for those

104、 operating within the art trade.Regardless of sales performance in 2023,the majority of feedback from research conducted in the market,particularly from the dealer sector,was that it had been a significantly more challenging year in terms of operating costs,with inflation in logistics,travel,rent,an

105、d other key areas creating a tighter year for profitability.Sales performance varied between the auction houses and dealers(with the latter covering both the primary and secondary markets).As noted in previous reports,in less certain economic and political contexts,private sales,whether through auct

106、ion houses or dealers,have often outperformed public auctions as sellers hold back and those that choose to or are forced to sell often prefer private transactions,keeping details and levels of demand out of public record.In buoyant markets,vendors are more enticed to sell publicly with the chance o

107、f higher-than-anticipated returns.During the pandemic in 2020,both dealer and public auction sales saw double-digit declines,although private sales by auction houses rose by over 40%.In 2021,as the market recovered and the outlook became more positive,sales advanced across the board,but auction sale

108、s showed the strongest increase year-on-year,advancing by just over 50%versus an uplift of less than half that amount for dealers(18%).In 2022,political and economic trends such as the war in Ukraine,rapidly increasing inflation rates,Chinas COVID-19 lockdowns,and looming recessions in other major m

109、arkets started to weigh on sentiment,and buying became somewhat thinner and focused on the high end,with wealthy buyers anchoring on works by the most established artists who they perceived were lower risk and greater stores of value.This sufficed to keep sales relatively stable,with growth in the d

110、ealer and private sectors offset by stagnation at public auctions,where the$10 million-plus segment was the only part of the market with a positive trajectory.In 2023,both public auction and dealer sales decreased,although the decline in auctions was more severe,falling by 7%versus a 3%drop in deale

111、r salesIn 2023,both public auction and dealer sales decreased,although once again,the decline in auctions was more severe,falling by 7%(versus a 3%drop in dealer sales)and saved from a deeper contraction through the injection of postponed 2022 sales in China early in the year.Private sales at auctio

112、n houses went against the declining trend,increasing by 2%year-on-year.23INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOKCombining all sales of auction houses(both private and public),the auction sector accounted for 45%of sales by value,stable compared to 2022,while dealers and galler

113、ies(including all online and offline retail sales of art and antiques in the primary and secondary markets)were at 55%.As always,the division between public and private sales varied widely between different regions and sectors.A detailed analysis of the dealer and gallery sector based on surveys and

114、 other research in 2023 is given in Chapter 2,while Chapter 3 examines the auction sector,focusing on sales at public auctions.IMAGE Pepn Osorio,image courtesy of Art Basel 24INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOK1.2 Regional Market PerformanceOne of the reasons for the more

115、muted trajectories of the last two years has been differences in the performance of sales in some of the major global art markets.Despite varying performance,the three largest art markets the US,China,and the UK continued to account for the majority of sales by value in 2023,although their combined

116、share fell by 3%year-on-year to 77%.Figure 1.3 Global Art Market Share by Value in 20232Arts Economics(2024)2 Percentages presented throughout the report are rounded and reported to their nearest integer(apart from those less than 0.5%).In some cases,therefore,the integers in charts do not sum to 10

117、0%(but sum to 99%or 101%)due to rounding.25INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOKFigure 1.4 Global Art Market Share by Value of the US,UK,and China 20132023Arts Economics(2024)The US maintained its position as the leading market worldwide,accounting for 42%of sales by value,d

118、own by 3%year-on-year.Following a 25%fall in sales during the pandemic in 2020,the US saw a robust recovery,with values increasing by 44%over 2021 and 2022 to reach a record high of$30.2 billion.This increase was supported by buoyant demand,particularly at the high end of the market,from local and i

119、nternational HNW collectors,with the US remaining the key center worldwide for sales of the highest-priced works.In 2022,these included the headline-grabbing$1.6 billion Paul Allen sale at Christies in New York,the largest total figure for a sale in the markets history,and six works of art sold for

120、over$100 million at auctions,all in New York.However,in 2023,as sales were thinner at the top,the US market lost value,with a decline of 10%year-on-year to$27.2 billion.Despite this slowdown in 2023,the US has been one of the strongest performing markets of the past 20 years and has helped drive the

121、 recovery of global sales both following the recent contraction in 2020,as well as after the global financial crisis in 2009.Although the decline left the US market just below its level of 2019,it has grown by almost one third in value in the 10 years since 2013.The market continues to be driven by

122、its position as the main global hub for the art trade,with the most expensive artworks brought to New York for sale to both local and international buyers.Sales in the US are therefore 26INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOKfueled by imports of art and antiques,and these mor

123、e than doubled in value from their low point during the pandemic in 2020 of$5.2 billion to$10.3 billion in 2022.However,imports saw more subdued growth in 2023,advancing by just 1%to an estimated$10.4 billion,which is down by 12%on pre-pandemic levels in 2019($11.8 billion).China,including Mainland

124、China and Hong Kong,became the second-largest market worldwide in 2023,moving up from third place in 2022,with its share rising by 2%to total 19%by value.Following three years of decline,Chinas sales had fallen to a 10-year low in 2020 of$9.9 billion.Although they bounced back by almost one third in

125、 value in 2021,strict lockdowns in place in 2022 under Chinas zero-COVID policies saw many sales and events curtailed and cancelled in the key art capital of Beijing,and values fell again by 14%year-on-year to$11.2 billion,their second-lowest level since 2009.As the economy reopened from January 202

126、3,there was a surge of activity in the market in the first half of the year,with postponed inventory from 2022s autumn auctions in Beijing sold to enthusiastic post-lockdown buyers,while Hong Kongs major fairs and exhibitions returned to their pre-pandemic,full-scale programs.This spike in sales hel

127、ped to make China one of the best-performing markets in 2023,with sales increasing by 9%to an estimated$12.2 billion,overtaking the UK as the second-largest market worldwide.However,the second half of the year was considerably slower,with the autumn auctions in 2023 underperforming those earlier in

128、the year,and indicating that some of the annual growth may have been temporary and specifically driven from the pent-up supply and demand following the unique conditions during the 2022 lockdowns.Projections of slower economic growth and a persistent real estate slump also weighed on demand at the e

129、nd of 2023,with experts concerned about the future trajectory of the market.(See Exhibit 3 for a discussion of the future of the Chinese art market.)Although sales in 2023 overtook their level in pre-pandemic 2019,they were still 20%below their value a decade earlier in 2013,when the market had reac

130、hed$15.3 billion.The Chinese market was the best-performing market in Asia,with sales in Japan falling by 9%year-on-year and declines in other key markets,including South Korea and Singapore.China and the UK have seen a lot of reshuffling in their relative positions in the global ranks in the last 1

131、0 years,and this continued in 2023,with the UK falling back to third place with a global share of 17%,down by 1%year-on-year.Along with the broader impact of the pandemic,the UK market has come under pressure over the last few years due to the complexities of Brexit and other economic factors,with s

132、ales falling to a low of$9.9 billion in 2020,the lowest level in a decade.However,sales revived over the next two years,rising by 20%over 2021 and 2022 to$11.9 billion,although remaining slightly below 2019s pre-pandemic level,and having experienced only around half of the uplift of the 3 Data on US

133、 trade from USITC DataWeb.27INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOKUS over the same period.The UK is a key hub globally and within Europe for sales of the highest-priced works in the art market,and in 2023,as these sales thinned,values in the UK fell by 8%to$10.9 billion,below

134、 pre-pandemic 2019 and 15%lower than 10 years previous in 2013.As a global hub for sales,like the US,the UK market relies on imports of art and antiques.Imports to the UK declined year-on-year,falling by 16%from$2.8 billion in 2022 to$2.3 billion in 2023(26%lower than the levels recorded in 2019).Sa

135、les in the French market also fell by 7%in 2023 to$4.6 billion,but it maintained its position as the fourth-largest market worldwide with a stable share of 7%.After a substantial decline of 30%in 2020 during the pandemic,the French market had a phenomenal recovery,growing by 62%over 2021 and 2022 to

136、 a peak of just under$5 billion.Even with the decline in 2023,French sales remained above 2019 values and have grown by 17%over 10 years.There was mixed performance in the rest of Europe,with a decline in the other major market of Germany,of 5%,set against strong growth in Italy and Spain.Sales in t

137、he EU as a whole fell by 2%year-on-year to an estimated$8.6 billion,and were down by 22%on their level in 2013(measured without the UK).Figure 1.5 Sales in the Major Art Markets 20092023Arts Economics(2024)4 Data on UK trade from HM Revenue&Customs.28INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCT

138、IONS4.OUTLOOK1.3 Online SalesAside from the changing value of sales,how transactions are made and the distribution of value through different channels continued to develop in 2023.After a dramatic increase in e-commerce during the pandemic,the art market appears to have settled into a mode of dual o

139、perations,with online sales maintaining a relatively high share even as live exhibitions and art fairs have returned to a regular schedule.Following years of slow,positive growth,online sales doubled in size in 2020 during the pandemic,reaching$12.4 billion as they became the primary mode for transa

140、ctions for much of the year.Even as the market opened up in 2021,e-commerce continued to grow and reached an historic peak of$13.3 billion,despite a slightly lower share of sales being made online.As art fairs,exhibitions,auction sales,and other live events ran on full capacity in most regions in 20

141、22,growth slowed,with online-only sales falling to$11 billion,a 17%decline year-on-year from the 2021 peak,as dealers and auction houses reported a reduction in their aggregate share of e-commerce.This decline in 2022 renewed the debate as to whether the market might continue to revert more to its p

142、re-pandemic division of online versus offline sales.However,in 2023,it became clear that this was not the case,and online sales continued to grow despite the downturn in the market.Aggregated online-only sales reached an estimated$11.8 billion,a rise of 7%year-on-year from 2022 and close to double t

143、he size of 2019.Online sales are defined here as those made by galleries,dealers,and auction houses,either through their own websites,online viewing rooms(OVRs),other platforms,or via email,without an in-person viewing or presale contact.In the case of auctions,online-only sales are those where a li

144、ve auction does not take place and do not include online bidding at a live sale.Online sales by dealers and auction houses are discussed in further detail in Chapters 2 and 3.Aggregated online-only sales reached an estimated$11.8 billion,a rise of 7%year-on-year from 2022 and close to double the siz

145、e of 201929INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOKFigure 1.6 The Online Art Market 20132023Arts Economics(2024)With this uplift in value combined with slowing sales offline,the share accounted for by online-only sales increased to 18%of the value of the art markets total turno

146、ver,up by 2%year-on-year.While this was below the peak of 25%in 2020,it was double the share of 2019 and increasingly aligned with other industries.The art market lagged behind other industries up to 2019,but the spike in online art sales in 2020 meant that the share of e-commerce in the art market(

147、at 25%)exceeded that of aggregate global retail(18%).These shares converged in 2021 as offline sales restarted in the art market,and art has remained at a slightly lower level for the last two years,but with a smaller margin than before the pandemic,in 2019.The pandemic induced a major shift in e-co

148、mmerce across many industries,with the share of general retail increasing from 14%of total sales in 2019 to 18%in 2020.This share continued to grow in 2023,reaching its highest level to date at 21%,and is expected to reach 24%by 2026.Like the art market,online sales outpaced total retail sales altho

149、ugh in this instance,they both grew,with total retail values up by just under 6%while e-commerce advanced by 9%year-on-year.While there were many examples of transactions at high prices in online-only sales,the tendency for the most expensive works to be predominantly sold offline remained,and 5 Sta

150、tistics on general retail are taken from Insider Intelligence data from E-Marketer,available at .30INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOKexplained in part the strength of online in 2023,as well as why e-commerce is unlikely to expand past a minority share.Data from the fine a

151、rt auction sector in 2023 showed that,like offline,the vast majority(over 95%)of transactions in online-only auctions were for prices of less than$50,000.However,unlike offline auction sales which are heavily dominated by value in the$1 million-plus segment,online-only auction values were based arou

152、nd the middle and lower ends:58%of the value of the online-only fine art auction market in 2023 was sales of lots priced at less than$50,000 and over 85%was those sold for less than$250,000.Surveys of collectors have also shown that price is still a key variable in determining the importance of view

153、ing a work in person versus engaging in an online-only sale,however,many have become increasingly comfortable transacting online sight unseen.In surveys of HNW collectors carried out in 2023 by Arts Economics and UBS,the most common method for purchasing art was through a gallery or dealer,with 86%o

154、f the 2,800 respondents having done so when surveyed mid-way through the year.Although the most common access point was still in person through a gallery,a majority of 65%of those buying from dealers had done so through their website in an online-only,sight-unseen transaction.Furthermore,these onlin

155、e-only transactions made up just over one third of their direct spending through dealers and galleries.58%of the value of the online-only fine art auction market in 2023 was sales of lots priced at less than$50,000 and over 85%was those sold for less than$250,000Besides being the most frequently use

156、d channel,dealers remained the preferred way to buy for most collectors in 2023,and around 30%of those who favored dealers opted for transactions carried out entirely online,with a share of 39%for Gen Z collectors.These findings indicate that while it may not be the preferred way to buy for all coll

157、ectors,buying online is widely used and accepted.It has also become a key entry point to the market for new buyers,both for dealers and at auction.As the number and value of online-only sales at auction have risen,online channels have been consistently identified as the main source of new buyers for

158、 both top-tier and smaller auction houses.The majority of online sales that dealers made in 2023 were to new buyers,and digital channels were an important source for new buyers in the sector,although still ranking behind art fairs and gallery visits.(Sources of new buyers and online sales in the dea

159、ler sector are discussed in greater detail in Chapter 2.)6 Arts Economics(2023)The Survey of Global Collecting 2023,An Art Basel and UBS Global Market Report.Available at:.31INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOKFigure 1.7 Share of Online Sales in the Art Market versus Genera

160、l Retail 20192023Arts Economics(2024)with data from eM32INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOK1.4 Art and NFTsA significant volume of sales continued to happen outside the traditional art market in 2023,both offline and through online platforms,supporting direct sales from ar

161、tists,creators,and resellers,which have had varying performance over the last year.While the surveys of HNW collectors mentioned above showed a considerable proportion interacting with dealers online through their own websites and digital channels,they also revealed a significant fall in the popular

162、ity of external online platforms,from being a first choice for purchasing for 17%of collectors in 2022 to just 8%in 2023,including NFT platforms and Instagram(both 3%)along with other online third-party platforms(2%).Unlike the cliche of social media and online channels being favored by younger coll

163、ectors,these platforms were much more popular with Boomers and older collectors than their younger counterparts.Art-related sales on non-fungible token(NFT)platforms are not included in the figures for art market sales in 2023 estimated above,as they occur outside of galleries,dealers,and auction ho

164、uses,but an analysis of these sales showed the surge in activity in 2021 and its equally dramatic decline over the last two years.However,even though values have declined,there was still considerable activity in these markets in 2023,with notable projects creating bursts of activity earlier in the y

165、ear.The development of the market for art-related NFTs was one of the biggest trends of 2021,although most of the activity and impact was outside the art markets galleries and auction houses on external platforms,creating active primary and secondary markets beyond the traditional framework.These hi

166、ghly liquid and continuously trading marketplaces,with few barriers to entry,attracted highly speculative buyers primarily interested in buying and reselling in a very short space of time for financial returns.This speculative trading led to a meteoric rise in sales from$605,000 in 2019 to over$2.9

167、billion in 2021.However,after peaking in August 2021,sales declined rapidly over 2022 as the price of Ethereum slumped and the volume of trade slowed.Data on sales of NFTs from NFT,which tracks the sale of all NFTs on the Ethereum,Polygon,and four other networks,shows the rise and fall of NFTs over

168、this period,with the market on these platforms settling at a lower but more stable level in 2023.NFT platforms cover several different categories of collectibles,including art,sports,music,and entertainment collectibles as well as a range of in-game and in-world digital items.Looking at the two most

169、 relevant segments of art and collectibles,art-related NFTs made up just 12%of the value of these two segments in 2019,but by 2020,had reached the majority share at 67%.However,since 2021,collectibles have dominated and in 2023,reached 84%by value versus only 16%for art.33INDEX INTRODUCTION1.THE ART

170、 MARKET2.DEALERS3.AUCTIONS4.OUTLOOKFigure 1.8 Share of Sales by Value of Collectibles Versus Art-Related NFTs 20192023Following the decline from 2021 to 2022,sales of art-related NFTs decreased by a further 51%in 2023 to$1.2 billion Even with the very significant fall in values from late 2021,sales

171、of art-related NFTs reached close to$2.4 billion in 2022,a decline of 16%year-on-year,but still representing values that were over 100 times the size of the market in 2020($20 million).However,following the decline from 2021 to 2022,the art segment decreased in value by a further 51%in 2023 to$1.2 b

172、illion.It is notable in Figure 1.9 that there were still spikes in activity and value around certain key art projects,including Jack Butchers Checks,an open edition NFT collection,which,along with two other projects,generated over$350 million in sales within the first few months of 2023 from one art

173、ist alone.After outperforming art in 2022,with values rising by 73%from$10.3 billion to$17.8 billion,the collectibles segment also saw a very significant fall in sales in 2023 to just over$6.3 billion,losing 64%of its value year-on-year.According to experts in the sector,this was a strong signal tha

174、t the purely speculative activity which dominated the collectibles segment and had for a period done so in the art segment was running out of steam,and they 34INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOKbelieved that this would lead to a gradual decline in the importance of the col

175、lectibles segment.The downturn in the market from 2022 stalled the most speculative buyers of art-based NFTs,with many holding onto their purchases rather than reselling at a loss during the bear market,causing a slowdown in resales.As noted in previous research,the average time between the purchase

176、 and resale of art-related NFTs in 2021 was very short at just 33 days,versus the average resale period on the art market of 25 to 30 years.35INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOKb)Average PricesFigure 1.9 Sales of Art-Related NFTs 20192023a)Value of SalesArts Economics(2024

177、)with data from NFT36INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOKFigure 1.10 Annual Sales of Art and Collectibles NFTs 20192023Arts Economics(2024)with data from NFTThe increasing numbers of different buyers and sellers associated with the art market and alternative ways of creatin

178、g and transacting artworks have also introduced new issues for regulators and governments.Some of the main regulatory issues that arose in the art market are discussed in Exhibit 1,and Exhibit 2 focuses on the legal framework for the market in China in 2024.37INDEX INTRODUCTION1.THE ART MARKET2.DEAL

179、ERS3.AUCTIONS4.OUTLOOKIMAGE Lu Yang,image courtesy of Art Basel 38INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOKExhibit 1.Navigating a Seaof InstabilityTill Vere-Hodge and Katalin Andreides*At the start of 2023,there was considerable optimism that the year ahead was going to be one o

180、f stabilization,following a challenging period with the fallout from COVID-related lockdowns,the reduction of frictionless trade through Brexit,and general de-globalization,as well as high inflation and volatility in global energy markets due to Russias invasion of Ukraine.Did last year chart a safe

181、 passage from choppy into somewhat calmer waters?The answer is almost certainly no.At the beginning of 2024,the global economy and art trade are facing yet more uncertainty through ongoing political instability,military conflict,and a sense of permacrisis.The geopolitical macroclimate and the regula

182、tory particularities affecting the art trade in different jurisdictions are likely to remain challenging and uncertain.This is despite calls for sensible regulatory measures to govern the global art market,and what appears to be competition for the best cultural statecraft by governments and legisla

183、tors to benefit the sector.Some of the key regulatory changes impacting the market in 2024 are discussed below.Taxation and Import VATIn 2024,general elections will take place in the US,India,and the UK,and there will be EU-wide elections for the European Parliament.In election years,taxation is usu

184、ally at the top of the political agenda.Often,tax considerations affecting the art market are formulated with zero-sum calculations in mind.One countrys gain by way of an advantageous tax regime will result in another countrys loss.EU Directive 2022/542 aims to create closer alignment of Member Stat

185、es VAT regimes.Previously,it was only possible for Member States to apply a reduced VAT rate on imported works of art,collectors items,and antiques,and works sold by artists themselves.Following the implementation of the directive,these objects can benefit from reduced VAT rates at the point of sale

186、 in their local primary and secondary markets and when purchased by museums.EU Member States first must each transpose the amendments and apply the new measures by January 1,2025.39INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOKHowever,the directive does not allow for the cumulative a

187、pplication of the reduced VAT rate on artwork imports in conjunction with the application of the margin scheme when selling the artwork.In other words,pursuant to the provisions,it will not be possible for a dealer first to benefit from the reduced VAT rate upon importation into the EU and then,upon

188、 onward sale,benefit from being taxed on the margin between purchase price and onward-sale price only.Implementing the directive,France could have chosen to maintain the 20%rate on profit margins for secondary sales,but would have had to extend that rate to imports and primary sales of art.To the re

189、lief of many French art market participants,French lawmakers opted instead to legislate not only to continue to offer a reduced rate at 5.5%for imported artworks,but also to extend the reduced rate to the vast majority of VAT-able transactions of artworks in France which are set to be taxed at 5.5%f

190、rom 2025 onwards.This amendment may be seen as an attempt to consolidate Frances position as the continents leading international art market further.The French regulatory attempt to boost its national art market appears to have inspired other Member States to consider their respective regimes with a

191、 view to remaining or becoming more competitive themselves.Notably,there have been discussions about legislative initiatives aimed at boosting the comparative tax position in other Member States,including in Belgium and Italy.On the other side of the English Channel,a number of trade associations ha

192、ve been lobbying the government to reduce import VAT for art and antiques from the current reduced rate at 5%to zero and to explore options to simplify and improve the Temporary Admissions regime to help reduce the administrative burden placed on the UK art market.With general elections on the horiz

193、on in the UK,the Labour Party has stated it will not introduce a wealth tax,nor increase Capital Gains Tax.A less explicit alternative to raising headline rates for the next UK government(be it Labour or Tory)might be to make changes to available exemptions or reliefs.There has been speculation that

194、 the current UK government may cut Inheritance Tax(IHT)ahead of the elections.Among the proposals under consideration is a reduction of the 40%rate,paving the way to abolish the tax altogether in future years.In press interviews in January 2024,the Labour leadership stated a Labour government would

195、reverse any such change to IHT.7 The margin scheme is an optional scheme for the art trade used as a means of reducing the possibility of double taxation on the sale of second-hand goods.It operates by allowing dealers to pay VAT on the difference between the sale price and the purchase price of the

196、 goods,instead of simply on the sales price.40INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOKThe US Presidential elections are set to take place on November 5.Depending on the outcome,there may be significant consequences not only for the applicable tax and trade policy relevant to ar

197、t and culture.Effective in October 2019,the Trump administration famously imposed tariffs on UK or German lithographs on paper or paperboard,and pictures,designs,and photographs that were printed within the past 20 years.In 2023,the Biden administration took the US to rejoin UNESCO,after the country

198、 had withdrawn under President Trump.Sanctions Regimes Remain Aligned For NowThe result of the US elections will likely also have a significant effect on US foreign policy decisions.Restrictive measures have already had a substantial effect on the international art trade.As at January 2024,the US Of

199、fice of Foreign Assets Control has had measures in place in relation to Afghanistan,the Balkans,Belarus,Burma,Central African Republic,Cuba,Democratic Republic of Congo,Ethiopia,Hong Kong,Iran,Iraq,Lebanon,Libya,Mali,Nicaragua,North Korea,Russia,Ukraine,Somalia,South Sudan,Sudan and Darfur,Syria,Ven

200、ezuela,West Bank,Yemen,and Zimbabwe.Such measures have,for example,included the blacklisting of certain individuals and companies,or imposing an outright ban on dealing in cultural goods,precious metals,luxury objects,and artworks in relation to persons in certain jurisdictions.So far,US,EU,and UK s

201、anctions regimes have largely targeted many of the same countries and territories with restrictive measures.It is not inconceivable that a Republican victory in the US Presidential elections could lead to more divergence of what has been a largely harmonized approach on both sides of the Atlantic.Co

202、nversely,there are geopolitical regions which have generally diverged from the Western approach by not imposing sanctions against states perceived to have been or become hostile towards the West.In relation to the Russia sanctions program,some such regions appear to have subsumed the art trade flows

203、 that previously existed between Russia and the West and which has become impossible due to the trade sanctions imposed by the west on Russia and vice versa.Notably,some of this trade now flows to the Middle East and parts of Asia and Africa.More Divergence in AML Rules?There has also tended to be s

204、ome convergence between the US,the UK,and the EU in relation to important aspects of their respective anti-money laundering(AML)regimes and their impact on the art trade(though less so than in relation to economic sanctions).Changes in government could also potentially bring divergence to these regi

205、mes.41INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOKThe US AML regime has focused on the antiquities trade rather than the high-value art market.In February 2022,the US Treasury considered whether to expand the application of its AML rules to the art market more generally.However,the

206、 Treasurys study concluded:As such,it is recommended that Treasury complete its ongoing work to close outstanding gaps before potentially turning its attention to the high-value art market.Conversely,in the UK,the trade in antiquities,coins,and ethnographic materials does not currently fall within t

207、he scope of the relevant AML regime.The art trade in general,however,does.The current AML rules in the UK and the 27 remaining EU Member States are all based on the implementation of the(EU)5th AML Directive,which means that each of the implementing countries were required to legislate individually

208、to give effect to the directives aims.By default,this has caused some divergence from the outset.On December 13,2023,the EU provisionally agreed on a new regulation and another directive to further refine EU AML measures across the trade bloc.While the new regulation will result in more harmonizatio

209、n among Member States,both instruments may lead to further divergence from the rules in the US and UK,respectively.The EU proposals include the extension of the definition of obliged entity to include crypto asset service providers and third-party financing intermediaries,and traders of luxury goods

210、 including precious metals,precious stones,jewelers,horologists,goldsmiths,traders of luxury cars,airplanes,and yachts as well as cultural goods.The regulation will also limit the use of cash payments for art transactions to a maximum of 10,000 and Member States are allowed to set an even lower ceil

211、ing.Prior to the 5th AML Directive,art market participants were considered regulated under the Directive if their aggregate annual transactions amounted to more than 10,000 in cash,and since the AML Directive,more than 10,000 in any form.Affected businesses will be required to comply with identity v

212、erification obligations on any person who carries out an occasional transaction,in simple terms,a single transaction,or series of transactions,outside of a business relationship in cash above 3,000.In January 2024,the UK National Crime Agency issued an amber alert highlighting sanctions evasion and

213、money laundering risks faced by the UK art storage sector because of the risk that criminals are finding ways to utilize the art market to conduct illicit activity.The UK authority intended to flag factors considered to be indicative of financial sanction 8 US Department of the Treasury(2022)Study o

214、f the Facilitation of Money Laundering and Terror Finance Through the Trade in Works of Art,p.34.Available at treasury.gov.42INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOKevasion,money laundering,or cultural property trafficking.These include changes in client circumstances,attempts

215、to transfer artworks to a family member or close contact,or to sell artwork or cultural property quickly,and move it to another jurisdiction.The alert refers to any facility or space that is used to hold,store,or move artworks,antiquities and/or collectibles,be it for the short term or for a prolong

216、ed period of time,including not only freeports,but also auction houses,art dealerships,galleries,and museums.Art and AI Harmonization or Convergence?Another key issue in 2023 is the need for a regulatory framework to deal with AI,specifically in relation to text and data mining for training AI algor

217、ithms.Clearly this will affect the art market in a number of ways,including in relation to the creative process,the protection of intellectual property rights,and the marketing and sales process within the art market.In March 2023,a UK White Paper proposed a regulatory regime that will use a princip

218、les-based framework for regulators to interpret and apply to AI within their remits.It will be guided by seven essential characteristics identified by the UK government:pro-innovation,proportionate,trustworthy,adaptable,clear,and collaborative.This light-touch approach is supposed to ensure the UK w

219、ill become a global AI superpower.In June 2023,the European Parliament approved a draft version of its AI Act,a legislative milestone to regulate AI in the trade bloc.In stark contrast with the UK White Paper,the EU law would require AI developers to publish summaries of copyrighted material used to

220、 train their respective algorithms,enact a near-total ban on the use of AI in facial-recognition systems,and mandate conducting risk assessments before technology is put into everyday use.In the US,the blueprint for an AI Bill of Rights,published in October 2022,could lead to a principles-based appr

221、oach more closely aligned with the UKs position.However,a joint US-EU initiative to draft a set of voluntary rules for businesses,called the AI Code of Conduct aims to build international consensus for AI governance.Potentially differing regulations could create a regulatory(and technological)gulf b

222、etween the US,UK,and EU and their respective art sectors.It is noteworthy that Germany,France,and Italy have put forward a counter-proposal to the EU proposed AI Act to promote mandatory self-regulation through codes of conduct.43INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOKEach jur

223、isdiction appears to be calculating how best to balance the protection of artists and copyright owners rights with the huge economic potential governments see in harnessing AI.For example,AI may be used for highly specialized services including authentication,conservation,and restoration,as well as

224、fundamental functions needed to market and sell art.In relation to intellectual property,there will continue to be case law on whether AI-generated art is capable of replicating the creative process copyright law seeks to protect,and if so,how.Art-Backed Loans on the Rise beyond the US?Finally,as no

225、ted in the report,there is significant use of credit and lending by collectors in the art market.The use of art as collateral for loans generally is not straightforward:the portable nature of art as an asset class,combined with difficulties in establishing title,provenance,authenticity and of course

226、,value,all create complexity and introduce risk for any lender who provides loan facilities backed by the borrowers art collection.Some lenders have been skeptical of the guarantee return on their loans because of fluctuations in valuations and the uncertain performance of the art market.Depending o

227、n jurisdiction,there may not be a central registry to record security over artworks and certain other chattels.For example,it is generally easier to check security interests over assets held by companies,rather than individual collectors.In relation to individuals in particular,this can potentially

228、lead to difficulties in identifying third-party interests,which might deter a potential lender who would want their interest in the art to be clearly identifiable.Art lending has tended to be much more prevalent in the US than elsewhere because of the Uniform Commercial Code(UCC),which records liens

229、 against assets,thus giving reassurance to lenders that the work of art is not already being used as collateral elsewhere.Bank of America for example stated in March 2023 that there had been a steady growth of 10%a year in art-backed loans over the past decade or so.Apart from differences in lending

230、 culture,regulatory changes to antiquated systems of recording liens in Europe and the UK could give this segment of the art market a boost there.This is particularly noteworthy given that the number of ultra-high-net-worth individuals wealth associated with art and collectibles is estimated to have

231、 increased sharply over the past couple of years.*Katalin Andreides is a Rome-based EU art lawyer who advises clients in a number of regions including Italy,France,Hungary,and Monaco.Till Vere-Hodge is a London-based solicitor at Payne Hicks Beach LLP,who advises clients on cross-jurisdictional matt

232、ers pertaining to art and cultural property law.44INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOKExhibit 2.The Legal Framework of Chinas Art Market Angell XI*The legal framework for the art market in China comprises two distinct segments which are operated by different dealers and reg

233、ulated by different authorities,according to different laws:i.Artworks which refer to works such as paintings,sculptures,installations,photographs,industrial art,and limited replicas of artworks;and ii.Cultural relics which includes both movable relics(such as historically important objects,artworks

234、,literature,manuscripts,and books of various dynasties)and immovable relics(like ancient tombs,mural paintings,stone carvings,and architectural structures).Artworks are much less regulated than cultural relics,with the Administrative Measures for Operation of Artworks(effective from 2016)being the m

235、ost important regulation,which specifies the major legal requirements for those operating in the art trade,such as obligatory record filing for all commercial activities related to art,including purchase,sale,lease,brokerage,import,export,appraisal or assessment,commercial exhibition,or investment.U

236、nder this regulation,whenever an artwork is imported or exported,for exhibition or sale,pre-approval from Chinas Culture Authority is mandatory before the Customs Office will release the artwork into circulation.In general,the approval is not difficult to obtain once the legal requirements are satis

237、fied.However,each year there are operators fined by the authorities for reasons such as not completing filings or exhibiting or trading without pre-approval.The measures also specify the obligations of sellers,such as due diligence if requested by buyers,the provision of proof of provenance,as well

238、as being prohibited from practices which currently include fractional ownership of artworks,illegal fund raising,and illegal pyramid selling.Cultural relics,on the other hand,are highly regulated in China,with prioritized legislative focus on their protection,administration,and optimized use.The mai

239、n legislation in this segment is the Law of the Peoples Republic of China on the Protection of Cultural Relics(revised in 2017),and under this regulation cultural relics are not permitted to be freely bought and sold commercially and can only be acquired through qualified legitimate 45INDEX INTRODUC

240、TION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOKchannels,including specifically licensed cultural relics stores and auction houses and even then,subject to strict administrative conditions.Cultural relics are under significantly stricter entry and exit controls than the import and export regulations

241、 that govern artworks,and in most cases,a cultural relic exit license has to be obtained from the State Council to take or sell them outside of China.For several years,sellers have hoped that some of the restrictions on cultural relics transactions would be lifted,allowing more freedom for trading b

242、y non-state-owned cultural relics,for the allowance of trade by vendors other than the strictly qualified sellers,and that foreign auction houses working in Mainland China would be allowed to auction cultural relics.In 2023,a milestone was achieved with the revised draft of the Law of the Peoples Re

243、public of China on the Protection of Cultural Relics published by the Standing Committee of The National Peoples Congress in October 2023.Some notable updates in the Revised Draft included:1.RestitutionRestitution was proposed to be included in the law,meaning that the State reserves the right of re

244、patriating cultural relics which were lost overseas due to theft or illegal export,with no statute of limitation.According to official statistics,approximately 1,700 cultural relics were successfully repatriated in the 10 years from 2012 to 2021.2.DigitalizationThis encouraged the promotion of the d

245、igitalization of cultural relics,with potential benefits for exhibition,academic research,creation or re-creation,as well as licensing or other commercial or non-profit culture exchange or collaboration.Beijings Palace Museum provided a good example of a successful museum licensing project which use

246、d cultural heritage creations,with turnover of$221 million in 2018,solely from sales of the licensed products.1 3.ExperimentationIn 2022,a regulation called the Several Provisions of Shanghai Pudong New Area on Trading of Cultural Relics and Artworks was promulgated,providing an experimental alterna

247、tive for cultural relics trading channels in addition to the licensed cultural relic stores and qualified auction houses.According to the provisions,a new organization called Shanghai International Cultural Relics and Artworks Transaction Services Centre would be established,to provide facilities,ap

248、praisal,and ancillary services to facilitate trading of cultural relics and artworks,which was seen as an experimental alternative while the time-consuming process of updating the national regulations is underway.9 Statistics from The State Council of The Peoples Republic of China(2021)Cooperation U

249、rged to Fight Relics Trafficking.Available at .10 Chen,A.(2022)Art Galleries and Museums:The Final Frontier of Brand Licensing in Campaign(22 November).Available at 46INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOK4.Updated Export RestrictionsIn 2023,a policy updating the export restr

250、ictions on works by artists who were deceased after 1911 caused much debate.The government formed a list of 315 artists and six studios from eight fields of art,including key sectors such as calligraphy and painting,ceramic,sculpture,fans,and others.In each field,there were several artists whose wor

251、ks were totally prohibited for export,including some of the most sought-after artists such as Guanzhong Wu,Fengmian Lin,Daqian Zhang,Baishi Qi,and 38 others under calligraphy and painting,who,as seen in Chapter 3,were among the highest-selling artists in some sectors.There were also artists whose re

252、presentative works were prohibited from export,including Yanyong Ding and 156 other artists.This policy is seen as a huge obstacle for trading theses artists works outside Mainland China,many of whom were the top-selling and most in-demand artists in 2023(as outlined in Chapter 3).There have also be

253、en many legal challenges for art e-commerce in China.China is one of the largest online markets in the world,and was estimated to be the second-largest digital economy globally,with a scale of$7.5 trillion in 2022,and a compound annual growth rate of 14%from 2016 to 2022.11 In 2023,Chinas total onli

254、ne retail sales revenue was approximately$2.2 trillion,according to the China National Bureau of Statistics.1 The digital economy has become Chinas state policy,with the Development Plan for the Digital Economy in the 14th Five-Year Plan Period published in 2022,as a milestone guideline for the futu

255、re.As in other markets,online channels proved indispensable during the COVID-19 pandemic.Through apps and WeChat Mini Programs,artworks continued to be traded,via retail,auctions,and private sales;exhibitions,fairs,auction previews,and galleries could be conveniently visited;and services including c

256、onsulting or education could be instantaneously received.While all these features made art more accessible and the art experience more efficient and interactive,legal challenges and risks needed to be accounted for and managed,with many of the legal and compliance requirements for offline art busine

257、sses also applicable online.Exhibiting and selling art online requires the same qualifications and procedural requirements as offline businesses,with additional requirements in some areas.For example,when trading NFTs or other digital collectibles based on blockchain technology,online platforms and

258、businesses require a blockchain information service filing and permit to do so(including Internet Content Provider or ICP and/or Electronic Data Interchange or EDI permits depending on the nature of the business).Cryptocurrency is also strictly prohibited in China,with failure to comply leading to c

259、ivil and criminal liabilities,meaning that NFTs have to be traded using traditional currency online.11 China Academy of Information and Communications Technology(2024)White Paper on Global Digital Economy(2023).Available at .According to the White Paper,the US was the largest digital economy in 2022

260、 at$17.2 trillion.12 Statistics from Chinas National Bureau of Statistics,available at .47INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOKWhen cultural relics or foreign artworks are exhibited or sold,either through e-commerce platforms or via social media(such as WeChat and Weibo),liv

261、estreams(like Douyin and Kuaishou),or social platforms(like RED/Xiaohongshu),procedural requirements are still mandatory.Due to the restrictions on cultural relics,online transactions are not open to operators with foreign investment from outside of China.A significant number of operators,including

262、art dealers,have been penalized for carrying out online auctions of cultural relics without pre-approval or organizing online sales or exhibitions of foreign artworks without pre-examination or by the competent authorities.In 2023,these included the(Hai)Wen Fa Zi No.1 case,where a Chinese auction ho

263、use was fined for exhibiting and transacting foreign artists artworks without obtaining pre-approval.Besides administrative liabilities,a few operators and their senior staff were also charged with criminal liabilities,such as smuggling,as in the Jing No.04 Xing Chu No.6 case in 2023,where a Beijing

264、 company operating an overseas art business faced criminal charges for smuggling along with their shareholder,who was also their legal representative,and the companys general manager.Copyright infringement is a big concern too,especially for online exhibitions in China.Copyright authorization is nec

265、essary for artworks within the copyright protection period as it is elsewhere and protected under the Copyright Law,while other intellectual property regulations are dealt with in the Trademark Law,Anti-Unfair Competition Law of the Peoples Republic of China(revised in 2019).There are also a range o

266、f laws and regulations on advertisement,promotion,and unfair competition for online transactions that companies need to be compliant with.Specifically,superlative adjectives such as the best or the most famous need to be avoided,and anything misleading or that may belittle competitors should be elim

267、inated,and in general,the legitimacy,authenticity,and accuracy of promotional text ought to be ensured.In September 2023,the draft of a regulation specifically related to online auctions was published by the State Administration for Market Regulation,1 which promotes enforcement such as prohibiting

268、false publicity and misleading advertisements;it also advocates that online platforms shall enhance legal risk control and compliance management skills and capabilities in respect of the operators on their platforms as well as themselves.With such efforts,it is expected that consumers could be bette

269、r protected and the art market could be more professional and trustworthy,as there have been so many examples of false,incorrect,and misleading promotional materials online in relation to art,even on the leading art platforms.13 The draft regulation was entitled Announcement of the State Administrat

270、ion for Market Regulation on Seeking Public Comments on the Guiding Opinions on Promoting the Standardized and Sound Development of Online Auctions(Draft for Comment).48INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOKRecent legislation has introduced greater laws around data privacy an

271、d the collection,use,storage,sharing,and cross-border transfer of personal information,which has also affected art market transactions and research,with substantial fines of up to$7 million or 5%of company turnover or even forced closure for more serious breaches.Finally,there are some other laws th

272、at affect or have affected Chinese HNW collectors,with the relevance of each dependent on the purposes of their collection,for example,wealth transfer versus philanthropy.One new regulation for collectors from May 2024,called the Administrative Measures on Names of the Social Organizations,will make

273、 it more difficult to establish art foundations with personal names,with the aims of preventing the misuse of famous personal names and to reduce disputes regarding the use of names and their associations with the foundations concerned.1 Other factors that can have a significant impact,especially fo

274、r collectors who buy or sell art globally,include the regulatory compliance on foreign exchange.As China adopts strict controls in foreign exchange,there are just two types of personal foreign exchange accounts possible,a capital account and a current account,which are allowed for limited purposes l

275、ike payment for overseas tuition fees,living costs,travel expenses,and medical costs.Payment is expressly prohibited for purchase of overseas real estate,investment insurance,or donations,and this includes art-related transactions.Therefore,when collections are structured for overseas markets,signif

276、icant advance planning is needed to ensure transactions can be done legally.In recent years,China has also been speeding up legislation,enforcement,and cooperation globally in the field of anti-money laundering,based on the existing 2007 Anti-Money Laundering Law of the Peoples Republic of China.Des

277、pite the continued growth of the Chinese art market,the development of anti-money laundering legislation and practice remained mainly applicable only to financial institutions,and specific non-financial institutions in areas such as real estate,accounting,and precious metals trading.Even for these i

278、nstitutions,the legal obligations are limited,mainly focusing on checks on clients identities,and the documentation they are required to keep.In practice,many art transactions in China are still concluded with cash,or on a barter basis,which makes transparency and traceability difficult to ensure.In

279、 2013,the Peoples Bank of China(PBOC)categorized art collection and auction as cash-intense industries which implies a 14 Article 15 of the regulation states that foundations and other social organizations should not use personal names of the Party,the State leaders,the older generation of revolutio

280、naries,or political activists.They should also,in general,not be named after individual persons,and if there is real necessity(to use personal names),only names of individuals who are outstanding domestically and internationally,who have made important contributions in the field of science,culture,h

281、ealth,education,or art can be used.If a foundation or private non-enterprise entity wants to use a personal name,this persons consent needs to be obtained.If the name of a deceased celebrity needs to be used,this celebrity should be a person who was outstanding domestically and internationally,or wh

282、o had made important contribution in the relevant fields of public interest.49INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOKhigh degree of risk,according to its Guidelines for the Assessment of Money Laundering and Terrorism Financing Risks and Categorized Management of Clients of Fi

283、nancial Institutions.PBOC then advised financial institutions to keep a close watch and monitor these kind of risks in relation to anti-money laundering.In January 2024,Chinas State Council Executive Meeting of China discussed the revised draft of the Anti-Money Laundering Law of the Peoples Republi

284、c of China(the AML Revised Draft),with a major focus on risk control of crypto-related anti-money laundering,based on numerous anti-money laundering cases that have had to be investigated in recent years.For example,in 2023,there were 2,435 individuals prosecuted for money-laundering crimes,with man

285、y believed to be related to crypto-currencies.In this AML Revised Draft,KYC due diligence was requested instead of a simple identity check of the consumers,and in addition to traditional financial institutions,certain individuals,enterprises,corporate,and special non-financial institutions also have

286、 legal obligations regarding anti-money laundering.It stipulates that collection or payments using large amounts of cash are to be closely monitored and shall be reported to the administrative authority,and when there is suspicious payment in cash,such as in a significant amount,the case shall be im

287、mediately reported to the designated centralized monitoring organization,which will decide on the next step at its own discretion.Enforcement of stricter AML regulations is likely to make the Chinese art market a safer place to transact in future and support greater involvement by collectors.*Angell

288、 XI is a partner at Jingtian&Gongcheng Shanghai Office and Co-Chair of IBA Art,Cultural Institution and Heritage Law Committee,Board Member of Licensing International.50INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOKIMAGE Lutz Bacher,image courtesy of Art Basel 51INDEX INTRODUCTION1.T

289、HE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOK2.DEALERS52INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOKKey Findings1.After two years of growth and recovery,sales in the dealer sector slowed in 2023,with aggregate values estimated to have fallen by 3%year-on-year to just under$36.1 billion

290、,and mixed performance between different segments of the market.2.While the high end of the market was pivotal in driving sales upward since 2020,there was a distinct change in trend in 2023,with aggregate sales for the largest dealers showing a more significant decline than their smaller peers.Deal

291、ers with turnover of less than$500,000 had the largest increase in sales(11%),while those at the top of the market with turnover of greater than$10 million saw averages decline by 7%.Many dealers at this level found that their sales were thinner at the top than in previous years,and buyers were more

292、 cautious about spending larger sums,unlike 2021 and 2022.3.Just under half(49%)of dealers reported that their sales were higher in 2023 than in 2019 prior to the pandemic,21%said they were at the same level,and 30%were lower.Despite not showing the strongest relative performance in 2023,the highest

293、-turnover dealers were still much more likely to have seen an improvement in their sales over the longer period,with 72%of those in the$10 million-plus segment reporting an increase compared to 38%in the sub-$250,000 segment.They were also by far the most optimistic regarding sales in 2024,with over

294、 half(54%)expecting an increase and only 8%predicting a decline.4.The average number of artists represented by dealers in the primary market increased to 23 in 2023 from 19 the previous year.For businesses operating in both the primary and secondary markets,the number was even higher at 39,up from 3

295、1 in 2022,as some galleries attempted to diversify their programs to generate sales and appeal to wider audiences in the flatter and more difficult market context.Despite the increase,there was evidence of more concentration of sales around top artists,with dealers reporting that one third of their

296、sales in 2023 came from their single-highest-selling artist,up by 2%year-on-year,although still below the peak of 43%in 2019.The share from their top three artists also rose by 2%year-on-year to 53%.53INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOK5.As the market context was character

297、ized by an elevated degree of uncertainty and risk aversion,sales continued to be anchored on the traditional mediums of paintings,sculptures,and works on paper,accounting for a combined 86%of dealer sales by value,up by 4%on 2022.While sales of digital,film,and video art saw a significant increase

298、in share in previous years,sales in these mediums declined significantly in 2023,accounting for less than 1%of the total,down from 5%in 2022.6.The issue of rising costs was a key challenge identified by dealers for the last two years,as rapidly escalating inflation continued to drive up operating ex

299、penses,including rent and payroll.In the face of slower sales and more variable demand in 2023,more businesses reported declining profitability,with 40%less profitable than they were in 2022(up by 8%year-on-year),31%around the same,and 29%more profitable(down by 10%versus 2022).7.The average number

300、of fairs dealers exhibited at was stable at four in 2023.However,the share of sales made at live events declined year-on-year,falling by 6%to 29%of total sales,higher than in 2021(27%)but below pre-pandemic 2019(42%).Dealers turning over more than$10 million reported the biggest drop in share year-o

301、n-year(from 40%in 2022 to 30%in 2023),while those in the middle market were more stable.8.Looking ahead,39%of dealers predicted that art fair sales would increase in 2024,down from 51%in 2022,with 14%expecting a decline.The largest dealers with turnover of greater than$10 million were the most optim

302、istic,with 50%expecting higher art fair sales.9.Transactions made in person through a gallery or dealers premises accounted for the largest share of sales by value in 2023 at 44%,down slightly on 2021 and 2022(both 47%).Considering the period from 2019,before the pandemic,to the present,the biggest

303、gain in share has been the shift back to direct sales by galleries:including sales made online or in-person,these have risen from 48%in 2019 to 64%in 2023.10.Total online sales,including those made directly as well as through third parties,accounted for 23%of dealers total sales in 2023,up by 7%in s

304、hare year-on-year and on par with 2021.The biggest growth has come from the increase in the share of sales through dealers own online channels and websites,which accounted for 20%in 2023,up from 12%in 2022.54INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOK11.Dealers sold to a larger nu

305、mber of buyers in 2023,with an increase from 57 in 2022 to an average of 83.The pandemic had limited dealers opportunities to reach new clients and the average number of individual buyers they sold to declined to 50 in 2021 from 64 in 2019.In 2022,the resumption of art fairs and a more regular sched

306、ule of events helped to expand this again,with a further uplift in 2023 to a five-year high.When asked about their greatest source of new buyers,art fairs were the most popular choice(30%),followed by walk-ins at the gallery(21%),underlining the importance of in-person viewing and communications for

307、 making sales.12.When asked about the biggest challenges for their businesses in 2023 and beyond,the prevailing context of political and economic volatility and the effects this could have on demand was ranked highest by most dealers.Maintaining their relationships with existing collectors was the s

308、econd highest,and was also identified as a key priority from 2020 through 2022.It is notable that while the maintenance of current relationships was key for dealers in 2023 and 2024,this became less of a priority when considering the longer term,outpaced by the importance of widening their geographi

309、cal reach in terms of new buyers.The costs of travelling to and participating in art fairs was ranked the third-biggest challenge for dealers in 2023 and 2024.55INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOK2.1 The Dealer Sector in 2023After two years of growth and recovery,sales in

310、the dealer sector slowed in 2023,with aggregate values estimated to have fallen by 3%year-on-year to just under$36.1 billion,and mixed performance between segments of the market.After dropping by 20%during the pandemic in 2020,sales in the sector proved highly resilient,bouncing back in 2021 as deal

311、ers adapted to new ways of operating and increased digital sales.As the exhibition and fair calendar returned to a fuller schedule,growth continued in 2022,increasing by 7%year-on-year and restoring the market to its value before the pandemic,in 2019.During these recovery years,dealers operating at

312、the high end were among the key drivers of the growth.Businesses with the highest turnovers saw some of the largest increases in sales,while many smaller dealers struggled with slower sales and rocketing costs.Although these issues remained in 2023,the geopolitical crises and economic uncertainty co

313、ntributed to greater sensitivity and slower sales at the top of the market,creating more stagnant results,despite a relatively active market at lower price points.For the purposes of this analysis,the dealer and gallery market is defined as consisting of businesses trading in fine art,decorative art

314、,antiques,and antiquities.As dealer sales are private and there is limited publicly available data on sales and other aspects of their businesses,surveys of the sector are used as the main guide to year-on-year trends.Arts Economics carried out an annual survey of dealers globally in December 2023,c

315、overing around 60 different regional or national markets,with a total of just over 1,600 responses.The global dealer sector is estimated to be made up of close to 300,000 businesses on a spectrum from sole traders to multinational companies,operating in the primary and secondary markets for art and

316、antiques.The survey sample was primarily drawn from dealers that are either members of dealer and gallery associations or who participate in art fairs,meaning that they are,for the most part,more established businesses.Due to entry requirements for fairs and associations,the sample tended to exclude

317、 many small businesses and sole traders,and hence a large volume of lower-value sales.1Just over half of the survey respondents had businesses in Europe(51%),with 21%of those from the UK and 17%each from France and Germany.Dealers from Asia accounted for 20%of the survey,23%were from North America,a

318、nd 4%from South and Central America.In 2023,dealers continued to experiment with new individual and collaborative business models,including permanent structures and others created for specific projects.However,in this sample,the most common model was to operate from a traditional,physical gallery 15

319、 More information on the dealer survey and sources is given in the Appendix.These surveys of the dealer sector have been carried out by Arts Economics consecutively for over 15 years,providing a means for tracking trends in the market over time.Interviews were also conducted with dealers in differen

320、t sectors and regions in 2023 and early 2024 to provide deeper insights into some key issues uncovered in the surveys.56INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOKpremises with a dedicated space for exhibitions(77%of respondents,down by 3%year-on-year,although still above the 75%r

321、eported in the surveys of 2021).The remainder ran their businesses from alternative premises including shops,warehouses,and offices(14%)or online-only businesses(9%).The majority of dealers(81%)operated from one region or market,with 69%from just one gallery or premises in one market,and 12%through

322、more than one premises in that one market.The share of dealers operating from one market was down by 4%year-on-year(from 85%in 2022),continuing a more significant decline from 2021 when almost 95%of dealers reported operating from only one location.This shift has been driven by some dealers continui

323、ng to expand their businesses into multiple global locations to access new collectors and expand the geographical reach of their exhibitions and sales,alongside a small but increasing share of those operating without a physical premises.In this sample,9%of respondents reported that they did not have

324、 a premises and operated an online-only business,up from 6%in 2022.The majority of dealers(81%)operated from one region or market,down from 85%in 2022Despite significantly increased rents and operating costs over the last two years,some dealers have continued to expand their physical premises global

325、ly.While expansions have continued in Asia,including openings by Peres Projects and White Cube in Seoul in 2023,there were also notable entries and additions in older,established centers.New York and Paris-based Marian Goodman added a new premises in Los Angeles,London-based Stephen Friedman Gallery

326、 opened in New York,along with the addition of a sixth premises for White Cube and expansions into the city by Anat Ebgi and an office premises by South African Goodman Gallery.In Europe,Hauser&Wirth,Mendes Wood DM,and Stuart Shaves Modern Art opened in Paris,while London saw one of the largest expa

327、nsions in new gallery spaces,including a premises for Alison Jacques,a third London gallery for Pilar Corrias,and entrants such as the Swiss Maria Bernheim Gallery and at least 10 well-publicized new or expanded young and mid-sized galleries in the city.These expansions came alongside indications of

328、 consolidation around a smaller number of regions,however,with galleries possibly becoming more focused on the costs versus returns from geographical diversification.Of those dealers with multiple premises in different regions in 2023,69%focused on just two regions(from 49%in 2022),19%operated in at

329、 least three markets,and just 12%in four or more(versus 22%in 2022).57INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOK2023 also witnessed some notable closures,including the 27-year-old gallery Cheim&Read,52-year-old Washburn Gallery,emerging specialist JTT Gallery,Denny Gallery,and Ma

330、lin Gallery in New York.The Simon Lee and Fold Galleries closed in London,with Gagosian shutting one of its three London galleries.While announcements of openings and expansions outweighed the closures,the latter are not always as well-publicized and therefore some only become known with a considera

331、ble lag.Nonetheless,in the larger markets,despite the intensely challenging period for businesses during the last four years,there are indications that the number of commercial art dealer businesses has been stable or risen.In the US,for example,the number of art galleries and dealers with employees

332、(excluding antique dealers and all non-employee businesses)fell slightly during the pandemic in 2020 and 2021,but in the second half of 2023,was 5%higher than in 2019.1 Similarly in the UK,the number of commercial art galleries and antique-dealing companies with taxable employees rose by almost 14%f

333、rom 2019 through to 2023.1 16 Data extracted from the US Bureau of Labor Statistics(2023),available at bls.gov.17 Data extracted from the UKs Office of National Statistics(2023),available at ons.gov.uk.Figure 2.1 Geographical Distribution of Premises Operated by Dealers in 2023Arts Economics(2024)58INDEX INTRODUCTION1.THE ART MARKET2.DEALERS3.AUCTIONS4.OUTLOOKAlthough the sample covered all sector