Currently, the Russian art market is made up of more than 20 auction houses, about 100 major galleries, 9 big private collectors, and over 20 thousand professional artists. Though it shows a lot of promise, it still has yet to come into its own. Researchers of the HSE Centre of Development Institute studied the contemporary mechanisms in place for trading paintings, graphic art, photography and sculpture in Russia, and they published their findings in a paper, ‘The Russian Art Market: 2018’. IQ.HSE compiled the most interesting takeaways.
According to The Art Market (Arts Economics), in 2017, the global art economy grew to almost $64 billion. The United States leads in global auction sales with a share of over 40%, ahead of China (21%) and the United Kingdom (20%). Russia’s share of the economy is miniscule; according to experts’ estimates, it makes up less than 1% of the sector.
At the same time, however, Russian art is in demand. Despite international tensions and collectors’ increased caution, there remains much interest in Russian art. In 2017, according to Artinvestment.com, Russian art sales at global auctions reached $455 million—1.5 times more than in 2016, though less than in 2014 by just as much ($677 million).
Moreover, Russian pieces are breaking bidding records abroad. The highest auction bid in 2017 was $41.8 million—and this was for Russian artist Wassily Kandinsky’s ‘Painting with White Lines’. And in the first half of 2018, Kazimir Malevich’s ‘Suprematic Composition’ was sold for $85.8 million.
TOP-5 Russian Art Sales at International Auctions
in the First Half of 2018 *
Auction sales in Russia lag behind their foreign counterparts by more than 50 times ($8.7 million versus $455 million). The biggest purchases in Russia in 2017 ranged up to 100,000 rubles, the most expensive of which was a piece that sold for $290,000.
The Russian art market is hindered most by its current size as well as Russian legislative restrictions on cross-border trade—namely, the ban on foreign auctions (the first and last Sothleby’s auction was held in Moscow in 1988). In Russia there are only representative offices of houses focused on informational and educational services for potential customers. There are no international gallery branches.
The art market in Russia remains in an embryonic stage to this day. In the USSR, which continually placed restrictions on art trading, the art market could not develop freely. In the post-Soviet period, the art market began to expand rapidly, but during the economic crisis following Russia’s annexation of Crimea, the market declined due the weakened purchasing power of collectors. The $8.7 million of sales in 2017 is almost 2.5 times less than in 2013, before the crisis.
The market is very sensitive to domestic and foreign politics. The inhospitable conditions of 2014, which saw a 67% reduction in the market from $21 million in 2013 to $14 million, were caused by the anti-Russian sanctions and the devaluation of the ruble.
According to gallery owners, it is important that they acquire works of contemporary artists, as the demand for them will grow in the next five years.
There are more than 20 thousand professional artists in Russia. The best of them from 2017 are included in two rankings: the TOP 100 most recognized Russian contemporary artists and the TOP 100 artists under 35.
According to the results of an InArt study, the most popular artistic medium is painting (comprising 80% of sales), with photography coming in second place and graphics in third. The most expensive works sold at international auctions in 2017 ranged from $32,000 to more than $61,000 in price.
Top 5 works of Russian Contemporary Art
(Selling prices at international auctions, 2017)*
More than 20 auction houses. Most Russian auction houses specialize in antiques, old books, and numismatics. Only a few are focused on the sale of contemporary art (such as VLADEY or Litfund). Key players in the fine arts sector (in terms of turnover in 2016) are SOVKOM, VLADEY, AI Auction, Litfond, and Russian Enamel. Russia does not have any large local houses that are comparable to Sotheby’s or Christies in terms of bidding and/or product prestige.
About 100 major art galleries. Russian galleries are located mainly in Moscow and St. Petersburg. Among other cities in Russia, Yekaterinburg stands out. These galleries are of varying profiles, specializing in classical art, Soviet art, and modern art. The Moscow-London gallery Ovcharenko (formerly, Regina) and the Moscow XL are the most famous today.
400–600 antique shops. Russian antique shops are concentrated mainly in Moscow and St. Petersburg, and they are gradually beginning to deal online.
About 5,000 private dealers. These include art dealers who are well-versed in art, have an educational background in the field, and have made art dealing either their primary or secondary source of income.
Private and corporate collectors. In Russia, there are nine large private collectors and several hundred medium-sized and small collectors. According to estimates of gallery owners, there are over 100 serious connoisseurs of modern art in Russia. Corporate collectors (such as Gazprombank, whose collection of contemporary Russian art made the TOP 80 Global Corporate Collections list) are increasingly seeing this activity as a social endeavor to preserve Russia’s cultural heritage.
In Russia, there is no stand-alone governmental support program for artists. Regional branches of the Union of Artists of Russia and the Creative Union of Artists of Russia receive government subsidies. The Ministry of Culture regularly allocates funds to non-profit organizations for the implementation of projects in the field of fine arts. Federal and municipal grant support for the arts is gradually developing.
Though various mechanisms to encourage art patronage are written into Russian law (in particular, the granting of awards and honorary titles to patrons), patrons and donors to state museums receive no tax breaks. The only things that help to create hospitable conditions for art collecting in Russia are the lack of taxes on wealth and inheritance of art objects.
The international demand for Russian art will continue. Over the next few years, Socialist realist art will continue to enjoy interest in the market.
In the domestic art market, Russian art will have to compete with its foreign counterparts. Mixed collections are growing more and more popular.
The auction business is gradually developing: at Russian auctions, you can now find a lot of pieces that are comparable to those you would see at Christie’s or Sotheby’s. More and more players will begin specializing in the sale of contemporary art.
Galleries will focus on transparency (by publishing catalogs with prices on official websites) and seek to more actively promote young artists. This will allow art dealers to find their niche in the highly competitive market. The emergence of new players, however, is unlikely, given the current economic instability due to the high cost of the business itself.
Remote trading is gaining momentum. There are already several online sales formats in Russia: online stores of offline galleries; aggregators with a wide range of products from various artists; artists’ personal websites where online ordering is possible; online stores specializing in specific areas of fine art, etc.
The art markets of other Russian regions will gradually adopt online sale services.
The shape of consumer demand will change. Technological developments will lead to an increase in the popularity of replicable art (graphics, photos, videos, etc.).
Wealthy conservatives aged 35–55 years continue to make up the bulk of Russian art collectors; for young people, intellectual consumption is a priority. The purchasing power of the middle class has not yet been restored to its pre-crisis capacity, but there was no demonstrated interest in acquiring art amongst this demographic even before the crisis.IQ