Changing global retail landscape: Can Hong Kong art galleries adapt? Part III


In an essay for Taiwan-based art magazine ArtcoArt Radar founder Kate Cary Evans discusses the tectonic shifts in the Hong Kong art scene over the past decade and what they mean for the future. The final instalment of the three-part essay focuses on the future of art galleries in Hong Kong.

Other posts in this three part series
Part 1: read part one here.
Part 2: read part two here.
Part 3: read part three here.

Read the original ARTCO article here (traditional Chinese).

Alice King, Founder of Alisan Fine Arts.

Evolution of the Hong Kong gallery scene

Thirty years ago there was just a handful of galleries in Hong Kong. Two galleries from that era survive to this day, both of which have formidable expertise in their areas of interest.

The 1980s: Alisan Fine Arts

Alisan Fine Arts was opened in 1981 by the soft-spoken Alice King, sister of former Hong Kong Chief Executive Tung Chee-hwa. King has introduced to Hong Kong Chinese modern masters including Zao Wouki, Chu Teh Chun and Gao Xingjian. She called these diaspora artists, who fled Communist China, the ‘Lost Generation’. Today, they are anything but lost, having since become huge auction stars.

Founder of Hanart TZ Gallery, Johnson Chang Tsong-zung.

The 1990s: China’s artists go global

Hanart was founded in 1983 by art critic and curator Johnson Chang Tsong-zung. Called “a force to be reckoned with in the global art world”, he introduced Chinese contemporary art to the West almost single-handedly in the 1990s. His landmark exhibition, “China’s New Art Post-1989”, toured from 1993 to 1998.

As Chinese art became more widely-known, more galleries appeared. In 1992, Schoeni and Kwai Fung Hin opened to show Chinese and some Western artists.

The early 2000s: Galleries show international art

The rate of openings increased after the beginning of the new millennium. Grotto Fine Art, a gallery which specialises in Hong Kong artists, opened in 2001, the same year as another important Hong Kong gallery, 10 Chancery Lane, swung its doors wide. The latter has shown ground-breaking survey exhibitions of Cambodian and Vietnamese art.

In 2003, the theatrical larger than life Sin Sin opened her first gallery space in Princes Terrace. It is the only gallery in Hong Kong to show leading contemporary artists from Indonesia, a country that she calls her soul home.

Other significant galleries include The Cat Street Gallery, known for showing Australian art, and Osage Gallery, which opened spaces across Asia but has trimmed its ambitions since and now works out of its Kwun Tong warehouse base.

Facade of Osage Gallery, specialising in artists from East and Southeast Asia.

In 2004, Amelia Johnson began to show emerging and international artists in what one curator called “little gems of shows”. Also in 2004, the first batch of chain galleries opened: Sundaram Tagore and Opera Gallery, each with a very different style of business. Sundaram Tagore, a New York-based art historian and descendant of the influential poet and Nobel Prize winner Rabindranath Tagore, shows a stable cohort of international artists, whereas Opera Gallery focuses on works rather than artists, and rotates its modern Masters and contemporary art works through its eleven gallery spaces around the world.

The late 2000s: Art market develops

Banker turned art collector Angela Li opened her eponymous space on Hollywood Road in 2008 as a promotional showcase for an art investment fund holding emerging artists from mainland China. The opening coincided with the Lehman crash and the bursting of the Chinese contemporary art bubble, but the gallery stuck to its focus, unlike many of the other established galleries who quickly broadened their offering to other Asian and international artists. CAIS Gallery was another that did not deviate, opening in 2008, it continues to only show work by Korean artists.

Fortunately for Hong Kong dealers, 2008 also saw the setting up of ART HK. It was an uphill struggle for Magnus Renfrew to begin with. In 2007, when preparing to launch the first fair, Mr Renfrew took forty flights in six months to convince international galleries to take part. “There was a lot of scepticism from the international art scene about doing art fairs in non-traditional destinations.” But that soon changed. The first year’s 19,000 visitors grew to over 60,000 in 2011. Hong Kong galleries reported brisk sales and many new customer relationships.

2010 and beyond: Sprouting of niche galleries

More progressive and niche-focused galleries have opened in the last three years. These include Exit Gallery (young progressive Asian artists), Saamlung, Blindspot (emerging and established photography mainly from Asia) and Input/Output (new media).

Screengrab from Alice Zhang's online gallery Mischmasch. Image by Art Radar.

Screenshot from the Hong Kong-based online gallery Mischmasch. Image by Art Radar.

In this new decade, a few galleries popped up that focused on work influenced by illustration, graphic design, graffiti, comic books, pop culture and street art. Two of these have since closed. Above Second, an artist run space in Sai Ying Pun, is still running, and Mischmasch is having some success with its online platform.

Hong Kong gallery scene today: Unique features

Today, there are over eighty art galleries in Hong Kong, but less than a score are platforms for art worthy of critical dialogue. The most notable galleries fall into the following groups: the recently-arrived international mega-galleries selling works in the USD20,000 – 100,000+ range; established local ‘one-man’ dealers as listed above, showing some international but primarily Asian artists in the USD2,000 to 40,000 price range; and finally, progressive and niche galleries who work in the same price range.

High rents pose biggest challenge

The scarcity and expense of retail space in Hong Kong is a significant issue for local dealers operating at lower price points, and many manage this issue by maintaining a small space in Central and keeping a warehouse space in one of the industrial areas of Hong Kong – Chai Wan, Kwun Tong, Aberdeen, Fotan – where they hold supplementary shows and display large works and projects.

While the expense of space has been a challenge, Hong Kong dealers have benefited from the city’s colonial history, which has left the small territory – population: seven million – with a laissez-faire economic model and a pro-business low tax regime with no import or export duties and no capital gains tax. The rule of law can be relied upon and the level of corruption is low. With a history as a gateway to China and Asia, it has strong freight and passenger transport infrastructure and a wealthy local population.

The international auction houses Sotheby’s and Christie’s are already based in Hong Kong and Art Basel’s purchase of a majority stake in ART HK has sealed Hong Kong’s future as the most important art hub in Asia.

Hong Kong's Central Police Station art complex.

Quality art institutions on horizon

One of its long-standing drawbacks, a lack of museums and non-commercial independent institutions, will be soon be remedied with a new contemporary art museum. M+ is set to open in 2017 with 20,000 square metres of exhibition space. In addition, the redevelopment of the Central Police Station on Hollywood Road into an art hub comprising sixteen buildings and an extra 1600 square metres of exhibition space is currently under way.

These advantages are proving a double-edged sword for existing galleries: while Hong Kong’s art hub status is attracting clients, there is no doubt it is also luring ever more competitors. In addition, deeper changes in the retail market caused by technological advancement and globalisation are about to make the environment considerably tougher for local and mega-dealers alike.

New trends in retail: Brands, multiple channel shopping, the web

Galleries coming to Hong Kong hoping to sell Western art to rich Mainlanders may be disappointed, at least in the short term. But the business decision to have a presence in Hong Kong is the right one for brand-building purposes in the coming multi-channel shopping environment.

Public hunger for luxury goods

The Mainland Chinese shopper’s roaring hunger for Western branded goods, and in particular luxury goods, rolls on and on. Gucci, Hermes, Prada, Chanel and other luxury lifestyle and fashion shops boast long queues and a frenzied snatch-and-buy rummage sale atmosphere. And brand love is not just an Asian phenomenon, but a worldwide one that is particularly prevalent among the young. The Brand Finance Global 500 report March 2012, which monitors the health of global brands, noted as a key finding that “luxurious lifestyle brands appear to be immune from the economic downturn”.

A scarf from Louis Vuitton's recent collaboration with Japanese contemporary artist Yayoi Kusama. Luxury goods producer Louis Vuitton has been a major supporter of contemporary art.

Shopping goes multi-channel

The Web has given birth to multi-channel shopping, a new style of buying in which consumers make purchases across physical, online and mobile platforms. Buyers will ‘touch’ high-priced brands multiple times across numerous channels before finally settling on a product. A retail storefront in one or more premier cities is a vital part of building brand assurance and trust. Ultimately, while a purchase may or may not take place in a shop, the shopfront continues to play an important part in the buying decision.

Success for retailers, including art dealers, will therefore depend on being able to build, maintain and work across each of the channels. To access and communicate with any customer, a storefront will not be enough. This is true for the Mainland consumer, too. The Chinese are now the second largest group of Internet shoppers in the world and “it is clear that Chinese consumers, especially the coveted urban dwellers and those in the middle and affluent classes (MACs), are quickly adopting ‘multi-channel’ shopping behaviors, creating both opportunities and challenges for brand companies, retailers and e-commerce companies alike,” says Boston Consulting Group.

Strong client relationships, service key

Dealers at every level, including the mega-dealer have fallen way behind the auction houses in harnessing the Web as a sales tool, a CINOA report points out. In the longer term, the rank-and-file dealer in Hong Kong faces challenges that are much stiffer than those of the mega-dealer. Operating at the lower end of the price range as one-man outfits, funds are lacking for building scale, branding or technology.

The best approach may be to specialise and focus on relationships and service. There may be some work to do here. In the CINOA report, collectors emphasised the following advantages and preferences when buying through dealers: guarantees and recourse, personal contact and price flexibility. The disadvantages cited were “pushiness”, high prices compared with perceived value and a lack of price transparency. Where there is strong competition and areas of customer dissatisfaction, we can expect plenty more change ahead.

Other posts in this three part series
Part 1: read part one here.
Part 2: read part two here.
Part 3: read part three here.

Read the original ARTCO article here (traditional Chinese).

This essay was written by Art Radar founder Kate Cary Evans and first published in the Taiwan-based magazine Artco, who have given permission for republication.


Related Topics: market watch – galleriesbusiness of art, market watch – globalisationart in Hong Kong, branding in art develops

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