The document provides an overview of the Indian art/paintings industry, including its value chain, current size, growth drivers, market segmentation, and correlation with China. It notes that the Indian art market was estimated to be around 1,460 crore INR in 2017 but has declined in recent years. Two key growth drivers are the increasing number of high net worth individuals in India and rising prices of top-tier artwork. The market can be segmented based on the typical price ranges and artist categories within each range.

1. 0
Indian Art/Paintings Industry Overview
Market Study, Growth Drivers, Segmentation, and Correlation With China
2018
Maple Growth Partners

2. 1
Table of Contents
Phase 1:
A. Indian Art Industry Overview – Value Chain, Size, and Growth
B. Growth Drivers - Both Volume and Value
C. Market Segmentation / Business Models
D. Any Correlation Between the Indian and Chinese Art Market?
Phase 2:
Identification of Promising Indian Artists from a Long-Term Investment Perspective (to be prepared
later)

3. 2
1. Indian Art Industry Overview

4. 3
Indian Art Industry - Value Chain
Art Production Primary Market Secondary Market
Residencies
Artists Through
Own Space
Public Art Museums
Dealers
Private Art Initiatives
Online Galleries
Art Fairs and Festivals
Collectors, Corporates, and
Consumers
Auction Houses
Private Art Galleries
Galleries
Dealers
• At the initial stage, an artist, the
sole creator of the artwork, may
utilize his/her own space for
artwork production or may use an
art residency
• Residencies are institutes that
provide artists with programs and
opportunities that enable an ideal
environment for ideas and
inspiration
Indian Art Industry Value Chain
Art Promotion and Sales
Art Resale - The secondary market
comprises artworks that have already
been sold at least once, with
collectors and patrons looking to
resell their collections to buyers that
want to diversify theirs.
Source: KPMG and FICCI - Visual arts industry in India, February 2018; MGP Research
Sell
Sell

5. 4
1,000
1,500
2,000
940
450 500
650
950
1,200
1,350
1,590 1,560
1,460
-
500
1,000
1,500
2,000
2,500
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
• India’s art market was estimated to be ~Rs. 1,460 crore in 2017, and reported a decline of 6.4% y-o-y as demonetisation and
introduction of the Goods and Services Tax (GST) adversely affected growth in the industry
• Visual arts broadly covers various physical forms of art including paintings, photography, sculptures, murals, graffiti,
antiques, miniatures and installations
• It is to be noted that approx. 99% of the art market in India comprises of paintings
• Before 2000, the Indian art market size was worth ~Rs. 50 crores. However, during the economic boom of 2003-2007, there was
a sudden spike in purchases of Indian paintings, predominantly bought by wealthy NRIs and Indians
• 2008-09 recession had an adverse impact on the market but it gradually recovered since then
Indian Paintings Market Size in 2017 was ~Rs. 1,450 crores
Indian Art Market Size (in Rs. Crores)
Economic boom
facilitating increasing
interest in Indian art
Recession
Recovery post recession – increasing interest in
art by new buyers due to rising HNI population
and online marketplaces
Decline due to
demonetization
and GST
Yet to Surpass the Peak of 2007
Source: The Arts Trust; KPMG and FICCI - Visual arts industry in India, February 2018
While the market grew at a CAGR of 9.0% between 2012 and 2017, overall it declined at a CAGR of
3.1% between 2007 and 2017

6. 5
0.8
0.9
1.2 1.2
1.3
1.7
1.8 1.8 1.9
2.0
2.1
2.3
2.5
1.7%
1.8%
2.1%
1.9%
2.2%
2.5%
2.5%
2.4%
2.4%
2.6%
2.8%
3.0%
3.2%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
0.0
0.5
1.0
1.5
2.0
2.5
3.0
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
India GDP (LHS, $ trillion)
Share of India's GDP to World GDP (RHS)
World Art Market Size ($bn) and Share of the Indian Market India GDP ($ trillion) and Proportion to World GDP
36
54
66
62
40
57
65
57
63
68
64
57
64
0.63%
0.61%
0.74%
0.35%
0.23%
0.19%
0.21%
0.31%
0.32%
0.32%
0.39%
0.41%
0.35%
0.00%
0.10%
0.20%
0.30%
0.40%
0.50%
0.60%
0.70%
0.80%
0
10
20
30
40
50
60
70
80
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
World Art Market Size (LHS, $ billion)
India's Share of the World Art Market (RHS)
While India’s Share to World GDP is More Than 3%, India Accounts for Less Than
0.4% of the World Art Market
India art market size in dollar terms was ~$225 million in 2017
Between 2007 and 2017, India’s share to world art market almost halved
while GDP proportion grew by 1.5x
Source: The Art Market 2018; Statista; Worldbank Data; Economy Watch – Economic Statistics 2017

7. 6
2. Growth Drivers - Both Volume and Value

8. 7
Indian Art Industry Revenue Accounted for a Miniscule 0.03% of the Total
Financial Wealth Held by Indian HNWI Population in 2016
India HNWI Financial Wealth ($ billion) Global HNWI Financial Wealth ($ trillion)
…On the Contrary, Global Art Industry Revenue Accounted for 0.3% of the Total Financial Wealth Held by Global HNWI
Population in 2016. Difference in this Art Revenue Proportion of Indian and Global HNWI Wealth is ~10x
582
477
589 612
785 797
877
0
100
200
300
400
500
600
700
800
900
1,000
2010 2011 2012 2013 2014 2015 2016
($billion)
10.8 10.7
12
14.2
15.8
17.4
18.8
0
2
4
6
8
10
12
14
16
18
20
22
2010 2011 2012 2013 2014 2015 2016
($trillion)
2016 Indian Art Market Size
is ~$230 million which is
~0.03% of the financial
wealth held by Indian HNWIs
2016 Global Art Market Size
is $57 billion which is ~0.3%
of the financial wealth held
by Indian HNWIs
Assumption: Indian art market will most likely tend towards the global art market. In other words, we believe that this 0.03%
proportion will most likely move towards the global proportion of 0.3%.
Immediate Addressable Market Size: Assuming that in the next 5-7 years, this art market proportion of 0.03% will likely rise to 0.1%,
the overall immediate addressable market will likely be estimated to be ~$900mn - ~$1bn range (= Rs. 5,500cr - Rs. 6,500cr) – This is
approx. 4x of the current art market size of ~Rs. 1,450 crores
Source: Capgemini – Asia Pacific Wealth Report 2017; MGP Analysis and Insights
Note: HNWIs (high net worth individuals) are defined as those having investable assets of $1mn or more, excluding primary residence, collectibles, consumables, and consumer durables
A Volume Value
To facilitate this 4x growth in the next 5-7 years
Both number of HNWIs and
paintings sold should increase
Value of the paintings (especially
the top-tier) must increaseA B

9. 8
153
126
153 156
198 200
219
400
0
50
100
150
200
250
300
350
400
450
2010 2011 2012 2013 2014 2015 2016 2021-22E
(NumberofHNWIs,‘000s)
Increase in the Number of Elite and Affluent Income Group Will Likely Drive the
Necessary Interest in the Art Market, as Potential Art Collectors and Investors
Indian Number of HNWIs (in ‘000s - People with Investable Assets of More Than $1 million)
Number of Indian HNWIs are expected to almost double over the next 5 years
Indian Households, By Income (Millions)
While elite income
group will drive the
top tier art market,
affluent group will
likely drive the small
ticket size paintings
market
Source: Capgemini – Asia Pacific Wealth Report 2017; BCG - The New Indian: The Many Facets of a Changing Consumer, March 2017; MGP Analysis and Insights
A.
Volume

10. 9
Indian Paintings Market Will Likely Grow Multifold When Other Established
Artists Artwork Will Sell in the Pricing Range Similar to Famous Global Artists
B.
Value
Costliest Indian Paintings Sold (in $mn, and Year of Sale) Costliest Global Paintings Sold (in $mn, and Year of Sale)
$4.5
$4.1
$3.6
$3.0 $3.0 $2.9 $2.8 $2.8 $2.7 $2.7
VS.Gaitonde,2015
FNSouza,2015
VS.Gaitonde,2013
TyebMehta,2013
AkbarPadamsee,2016
S.H.Raza,2014
AmritaSher-Gil,2015
V.S.Gaitonde,2015
TyebMehta,2014
AmritaSher-Gil,2015
$450
$304
$270
$213 $203 $190 $182 $182 $173 $165
LeonardodaVinci,2017
WillemdeKooning,2015
PaulCézanne,2011
PaulGauguin,2014
JacksonPollock,2015
MarkRothko,2014
Rembrandt,2015
PabloPicasso,2015
AmedeoModigliani,2015
JacksonPollock,2006
Value of the costliest Indian painting is paltry when compared to the most expensive paintings ever sold globally. In
other words, most expensive Indian painting is just 1% of the value of the world’s costliest painting. It is a no brainer to
assume that the art market in India will grow multifold when the value of the costliest Indian paintings will grow
significantly, more towards in line with the global pricing range.
For the overall market to grow, there should be an increase in proportion of the artwork of the other set of established
artists in the similar range. Need of the hour is that the paintings market should shift from the concentrated dominance
of these top 6-8 artists to a much broader group of say 40-50 next-tier established artists in the similar pricing range
(upwards of Rs. 1 crore)
The top tier of the Indian paintings market is filled with artwork of a very few 6-8 famous artists such as VS Gaitonde,
Tyeb Mehta, FN Souza, SH Raza, MF Husain, Amrita Sher-Gil, and Akbar Padamsee. Top 100 costliest paintings ever sold
in India is dominated by this group of artists.
Source: The Art Trust; Open Internet Search; MGP Analysis and Insights
Ticket size of the Indian paintings should
grow per the lines of the global counterpart
Top 10 costliest paintings globally are priced
above $150 million

11. 10
While Young Contemporary Artists are Expected to Drive the Artwork Volume,
Established Contemporary and Modern Artists Work Will Likely Drive the Value
A. & B.
Less than Rs.
50,000
Rs. 50,000 – Rs. 3
Lacs
Rs. 3 Lacs – Rs. 10
Lacs
Rs. 10 Lacs – Rs. 50
Lacs
Rs. 50 Lacs and
more
Pricing Range of Indian Paintings and Typical Category of Artists Within the Corresponding Range
Cost of Paintings
Young
Contemporary
Artists
Young and
Relatively New
Contemporary
Artists
Established Contemporary Artists and
Regular Artwork of Famous Modern Artists
Predominantly the
most sought-after
artwork of modern
artists
• Number of artists in these two categories
are expected to rise going forward as the
market is being gradually filled with young
budding artists with decent exposure
• It is estimated that every year ~4,500
students graduate from painting and
drawing colleges and ~500 students enroll
in the related masters program
• New artists entry are not just restricted
from the regular college of arts, however,
there is a good influx of artists from other
streams such as architecture, animation
and digital functional areas
• Also, increasing influence of online
medium and rising internet marketplaces
will continue to drive volume of paintings
Source: MGP Estimates, Analysis and Insights
• These two categories, established contemporary and modern
artists, are well positioned to drive incremental artwork value going
forward
• Almost all of the major modern artists in India have passed away or
established contemporary artists are getting old – thus their
paintings in the market is limited / scarce. This implies that their
artwork value will most likely perpetually increase over the long
term period, barring intermittent recessionary periods
• The most expensive painting of an Indian artist was of
Vasudeo S Gaitonde, fetching ~$4.4 million (Rs. 29.3 crores)
• Other famous modern artists include SH Raza, MF Husain, FN
Souza, Arpita Singh, Rabindranath Tagore, Tyeb Mehta, etc.
• Famous contemporary artists include, Subodh Gupta, Atul
Dodiya, Jitish Kallat, Anish Kapoor, Nalini Malani, etc.
• The artwork of the artists in these two categories account for more
than 75% share of the Indian art market by value
Volume Driver of the Market Artwork Pricing Value Driver

12. 11
3. Market Segmentation / Business Models

13. 12
Other Than the Usual Galleries and Auction Houses, the Indian Art Market can be
Further Segmented Into the Following Diverse Business Models
Art Insurance Logistics / Storage
Art Financing
Companies
Authentication and
Provenance
Online Marketplace
(Buy / Sell)
Art Designing
Merchandise Platform
Art Valuation and
Advisory Services
Crypto / Blockchain-
based Art Companies
• Paintings are vulnerable
to perils like fire, theft,
flood, defacing, and
accidents when they are
either stored, displayed,
exhibited or in transit
• Insurance cover provides
for such unforeseen and
sudden loss or damage
Various Business Models Across the Indian Art Industry Value Chain
• Lend from their own
balance sheet or tie-up
with third party lenders
• They analyze borrower
profile, match client to the
most appropriate lender,
negotiate terms and
contracts or refinance
existing art loans
• Provide art storage,
framing, crating, transport,
documentation, handling,
and packaging services to
galleries, museums, artists
and collectors
• Facilities feature security
& climate control systems
to protect / preserve art
• Artists use certificates of
authenticity to prove its
authenticity
• It contains information
such as title, medium,
date, signature, etc., which
can possibly make an art
buyer more comfortable
with buying an artwork
• Art-Focused Online
Marketplaces and
Galleries such as Mojarto,
AstaGuru, and SaffronArt
• Large seller marketplaces
such as Amazon & eBay
• Social media sites such
as Facebook, Pinterest &
Instagram
• Specialized services in art
collecting and collection
management
• Services include locating,
researching, valuing
purchasing and selling
works of art along with art
advisory and periodic
appraisal consultancy
• Online platforms for visual
artists to showcase, share
and sell their work on
various consumables such
as t-shirts, laptop skins,
canvas prints and posters
• Artist create products with
their art on them using the
product design tool
• Blockchain-based art start-
up companies and
initiatives
• Art-related services built
on the art data blockchain
infrastructure, executed
through smart contracts
Source: MGP Research Insights
8
41 2 3
5 6 7

14. 13
Indian Art Insurance Segment is Dominated by Large Insurance Firms, Hardly
Any Actionable Targets for Private Equity Firms or Venture Capitalists
• There is hardly any small or mid-sized firm that is focusing on art insurance in the Indian market
• Indian art insurance market is dominated by large bulge-bracket insurance firms such as Tata AIG, Future Generali,
HDFC Ergo General Insurance, Reliance General Insurance, ICICI Lombard, Bajaj Allianz, Bharti-AXA
• While art insurance is still in a nascent stage, the estimated value of art that can be insured in India is about
Rs 6,000 crores
• Only a small segment is covered with art insurance policies since there is lot of undisclosed art/valuables in the
Indian market
• The items insured under 'art and valuable insurance' usually include fine arts, paintings, expensive carpets,
watches, clocks, expensive furniture, chandeliers, statutes, sculptures, books, expensive and antique jewelry
(gold / silver/ diamond)
• Public sector general insurance companies also offer similar art insurance products, however, their penetration
is still quite low
• Art insurance segment is expected to grow multifold since art collection will likely move from realms of interest
and passion towards long term investment holding going forward
• Premium for art insurance policy depends upon factors, such as sum insured per article or per location, whether it is
kept at one place or moved to different places for exhibition, art type (antique furniture, musical instrument, statue,
sculpture), security measures available at the premises, coverage to be offered, geography and type of collector
• Typical art insurance policy covers, defective title, automatic reinstatement, replacement of keys and locks,
temporary storage costs and exhibitions covers
• Creating an insurance policy for an art collector requires one-on-one consultation since every art collection is unique
"India, till recently had a lot of undeclared wealth and ultra HNIs were skeptical of insuring their private collection for
fear of disclosing such details to an outsider. But as customer awareness is building, we are seeing a significant more
number of inquiries and demand for such customized covers.”
Parag Ved, Executive Vice President - Consumer Lines, Tata AIG General Insurance, 09 Aug 2017
Source: DNA - Insurers paint on Rs 6,000-cr art insurance canvass, 09 Aug 2017;
1

15. 14
There is no Organized Market for Art Financing in India, However, Globally-
Speaking, Art Lending is a Booming Market Segment
While there is no art-secured lending market in India, we have focused our findings from a global market perspective
• Two leading art lending markets i.e. US and Europe have prevailed over the past few years. While US art lending market is
dominated by major banks and auction houses, Europe market is largely served by specialized providers of art financing
• The US art-secured lending market is expanding rapidly, aided by low interest rates, a growing art market, tax provisions, an
attractive legal environment provided by the Uniform Commercial Code (UCC), and a different attitude towards the financial aspect of
collecting art
• The art-secured lending market in the US reached an estimated $17-20bn in 2017, growth of 13.3% y-o-y. Banks/private
banks accounted for ~81% share of the US art loan market, followed by boutique lenders (11%), and auction houses (8%)
• Art-secured lending takes two main forms, recourse and nonrecourse. Private banks typically offer recourse loans, meaning the art
serves as collateral for the loan but the borrower also has to give a personal guarantee of repayment. That means if the borrower
defaults and the bank can’t recover the full amount of the loan by selling the art, it can make a claim on the borrower’s other assets
• With nonrecourse lending, the only asset that is the security for the loan is the artwork itself. In those instances, the
creditworthiness of the individual is much less important than the art itself
• A host of smaller lenders, such as Borro, Art Capital Group and Falcon Fine Art, have started offering nonrecourse
loans, which don’t require the borrower’s personal guarantee
•
Source: WSJ - Art Plays a Growing Role as Collateral, June 2015; Deloitte and ArtTactic – Art and Finance Report 2016 and 2017; Widewalls - Art Lending Business Booming - New Sales at Top
Level Are Reason for the Boom, August 2015; Conceptual Fine Arts - Art secured loans: trick or treat?, November 2017
2
US Art-Secured Lending Stakeholders
Client Segment Lenders
Loan Portfolio
Size
Average Interest
Rates
5 Year Annual
Growth Rate
Banks / Private
Banks
U.S. Trust; J.P. Morgan; Citi Private Bank; Goldman
Sachs; Northern Trust; Morgan Stanley Wealth
Management; BNY Mellon Private Bank; CIT Private Bank
$13bn -$15bn
Libor + 1 to 3%
15%
Boutique Lenders
Borro; NewOak; Athena; Art & Finance Partners; Artemis;
Special Opportunity; Hedge Funds; Family Offices
$700k - $1.2bn
Libor + 7 to 15%
13%
Auction Houses Sotheby’s; Christie’s; Heritage Auctions; Phillips; Bonhams $1bn - $1.4bn Libor + 5 to 7% 30%
Most firms lend only about 40% to 50% of an artwork’s value but firms such as Borro are differing from its competition by offering
cash amounts up to 70% of the artwork’s worth, as long as the company gets the right to sell the artwork in question. Additionally,
in 2016 loan-to-value rarely hit 50% on average, a set of private US banks started offering up to 55% LTV in 2017

16. 15
Indian Art Logistics Market is Very Small But Expected to Grow With Rise in
Art Volume and Collectors’ Interest; Most Art Logistics Firms are Diversified
3
There is hardly any data points for the Indian fine art logistics market. Although it is at a very infant stage, this market will likely grow significantly
going forward with expected rise in paintings sales volume driving a need for artwork storage / preservation, and need for specialized packing,
handling and crating services
• Increase in online sales and cross-border trade of fine arts products, will likely drive demand for the Indian fine arts logistics market
• Globally, fine arts logistics firms provide a range of technologically specialized logistics services, such as radio-frequency identification (RFID) for
fine arts inventory tracking, GPS-enabled transportation trucks for tracking, bar coding, and MIS-related services. These IT-enabled services
increase the efficiency of logistics services, on-scheduling transportation and delivery, and inventory management
• Also, fine arts logistics vendors are now using customer relationship management (CRM) solutions, which are cloud-based, to enhance
the shipper-vendor relationship by providing more visibility in the supply chain process, thus reducing complexity in supply chain
management
• The market is experiencing an increased demand for professional fine arts logistics services that provide high-end event logistics and
supply chain solutions, with value-added services
• Some of these services are assortment, packaging, and delivering of sculptures, paintings, artifacts, fine arts event stage set-up; site
research and selection; travel management; onsite office infrastructure; theme decor; fine arts event planning and management; program
security and management information system services in the fine arts logistics supply chain, and various other legal formalities necessary
in the process
Indian Art Shipping and Storage Companies (Most of them are Diversified With a Segment Focused for Art Logistics)
Sr no Company Description Headquarters Website
1 United Artlogistics
(Pureplay)
Claims to be the first company in India dedicatedly providing art
logistics services such as handling, packing & crating and
transportation with international standards.
New Delhi, DL http://unitedartlogistics.com
2
Star Worldwide Group
(Diversified)
Provides specialized and professional service for fine art handling &
transportation.
Faridabad, HR http://www.starww.com
3
Writer Relocations
(Diversified)
Offers customized packing and handling of valuable fine art collection.
A diversified group with fine art handling as of its wide service portfolio
Mumbai, MH
http://www.writercorporation.c
om
4
Mithals International
(Diversified)
Offers packing & crating for exhibits & artwork, fine art shipping,
installation handling, museum standard crating, domestic and
international shipping and warehousing, storage in designated climate
controlled rooms, art fairs & exhibition handling / logistics, insurance,
and courier services.
New Delhi, DL http://www.arttransport.net
Source: Open Internet Search; Company Websites; MGP Research

17. 16
Forged Artwork Value in India is Estimated to be ~ Rs. 80 – 100 crore (~5-7% of
the Overall Indian Art Market) Driving a Need for Authentication & Provenance
4
• The Indian visual art space is increasingly prone to fakes and forgeries. People producing bogus art works who operate under
secrecy are technologically qualified. Buyers are driven by emotions and investment, and often have a limited knowledge of the
expansive field of art
• Art forgeries have a dual impact. For artists, they result in heavy monetary losses while also hampering their reputation.
For collectors, forgeries can cause buyer’s remorse and indecision
• Very small proportion of buyers carry out a formal diligence on provenance, with a majority banking on certificates from
experts and artists which are not always reliable
• An assessment of provenance, details of chain of previous owners of the artwork, is critical to ascertain authenticity and
valuation of the artwork
• However, establishing provenance has also become a major challenge as art imitators often forge documents that
include provenance information such as ownership marks, sale receipts, family letters, exhibition labels, collector’s
stamps dealer records, etc.
• A written declaration from the artist, when available, is the highest proof. All other evidences, including confirmation of
genuineness by family members have been challenged in the past
• Authenticators of art in India are not required to possess any formal qualifications, so it is often difficult to figure out who
to have faith in. This is why the provenance, or the chain of previous owners is often relied upon to determine authenticity
• The trend of insurance covering art provenance is also not very prevalent
• Start-ups such as Verisart are leveraging decentralized technologies to assist artists and art collectors with novel methods to
verify, document, authenticate artworks
• Verisart is using blockchain technology to create a worldwide ledger of art and collectibles, together with data from the
museums, to deliver instant valuation with provenance tracking; for artists, collectors, appraisers and insurers
• Verisart, based in London (UK), is the world's leading platform to certify and verify artworks and collectibles using the
bitcoin blockchain
In India, legal agreements for art transfers have not historically been a norm and are not always available with ease.
There’s no one law governing the art market but a combination of laws, statutes and torts. Typically, market functions on
trust instead of contracts. In the absence of a convincing machinery to authenticate art, India is in need of stringent laws
that deter counterfeiters
Source: Economic Times - Why potential buyers of valued artwork must get a provenance review first, 15 October 2017; The Hindu - The art of deception, 25 March 2017;
KPMG – FICCI: Visual arts industry in India: Painting the future, February 2018

18. 17
• The online space is a game changer for young artists who find it difficult to showcase their works at physical art galleries due to
lack of financial resources and contacts
• Online art marketplaces are making the traditional process of art discovery and buying much more convenient and faster with a
number of firms adopting a digital approach for selling art
• In 2016, Saffronart, one of the leading international auction houses in India, sold art worth $30 million through online only
auctions
• While a number of online-only platforms, backed by venture capital funding, have made inroads into the Indian art space,
traditional galleries and auction houses have also made forays in the online art territory
• For instance, Sotheby’s expanded its online business globally, which includes online only auctions, to $155mn, witnessing a growth
of 19% in 2016
• On the other hand, Christie’s increased its global online auction business by 34% from $162mn in 2015 to $217mn in 2016
• Increasing competition in the offline space is forcing offline-only art platforms, such as Heritage Auctions11, to adopt new strategies
to take their business online and broaden their revenue streams
• However, the online sale of art faces a few inherent challenges
• These challenges come from cautious art patrons that are hesitant to buy art on digital platforms. Amongst their many concerns, the
key factors are currently focused around the lack of physical inspection and concerns regarding the artwork’s condition,
genuineness, and the seller’s reputation
Global Online Art Market Size and Growth Outlook
1.5
2.6
3.3
3.8
4.2
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
2013 2014 2015 2016 2017
($billion)
CAGR 2013 – 2017: 29.4%
Global Art
Buyers
Global Art
Galleries
Global Online
Art Platforms
Global Online Art Market Outlook for Next 1 Year
52% of those
who bought
online last year
say they will
buy more art in
the coming 12
months
65% of art
galleries expect
online sales to
grow between
0% and 10% in
the next 12
months.
81% expect
more
consolidation in
the online
industry as
competition
intensifies.
• Global online art sales
account for ~7-8% of
the total art market
• While numbers for the
Indian online art
market is not publically
available, we estimate
that this market is less
than 3% share of the
total Indian paintings
market (< Rs. 50 crores
or $8mn)
Source: KPMG and FICCI - Visual arts industry in India, February 2018; Hiscox Online Art Trade Report 2018; MGP Estimates and Analysis
Online Art Market (1/2): Growing Influence of Selling Art via an Online Medium,
However, It is Still at a Very Nascent Stage
5

19. 18
Share of Online Sales (via Invaluable) by Auction House
Turnover Level
Share of Online Sales (via Invaluable) by Turnover Level
2014 Versus 2017
Share of Online Sales 2015–2017 (via the-saleroom.com) Dealers’ Views on Online Sales Over the Next Five Years
Note:
1. Invaluable, LLC operates an online auction marketplace of fine and decorative arts, antiques, collectibles, and real estate sales
2. thesaleroom.com is Europe's leading portal for fine art and antiques auctions.
Source: An Art Basel & UBS Report - The Art Market 2018
27.0%
22.0%
14.0%
11.0%
6.0% 5.0%
7.5%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
Under$250k
$250k-$500k
$500k-$1m
$1m-$5m
$5m-$10m
Over$10m
All
14%
3%
4%
18%
7%
8%
0%
5%
10%
15%
20%
Under $1m Over $1m All
2014 2017
Share of online sales of total art market
has increased in the previous 3 years
30%
32%
36%
22%
24%
27%
0%
5%
10%
15%
20%
25%
30%
35%
40%
2015 2016 2017
% of Volume Sold Online % of Value Sold Online
Online proportion of both volume and
value have increased over the years
12%
53%
33%
1% 2%
0%
10%
20%
30%
40%
50%
60%
Significantly
increase
Increase Stay about
the same
Decrease Significantly
decrease
~65% of survey respondents
believe that online sales will
increase going forward
Naturally, low pricing artwork have
higher online sales proportion
Online Art Market (2/2): Due to Lack of Indian Online Art Data, We Considered
Global Numbers as a Benchmark to Sense the Prevailing Online Influence
5

20. 19
An Inefficient Art Market Like India Will Always Have a Considerable Demand
for Art Advisory Service Providers
6
Source: MGP Research and Insights
Art Valuation,
Advisory, and
Collection
Management
Service Providers
• 2% of management fees and 20% carry
of profits (after 15% hurdle rate) OR
• 5-10% of total retail value of the artwork
• Usually commission is high for low
value artwork while low for high value
artwork
• Artwork valuation factors depend on
the size, genre, condition, price of
similar pieces, artists’ past exhibitions,
etc.
• Valuation, artwork authentication, appraisal,
investigation of provenance and condition
• In-depth knowledge and project
management services in all areas of
research to curators and institutional
collectors, seeking privileged access to the
region
• Researching, market analysis and
monitoring for all categories of art
• Logistical to admin advisory on
conservation, framing, installation, and
storage
Advisory Services
Advisory Commission or Fees Art collectors
and investors
Art Advisors or Consultants in India (1/2) Art Advisors or Consultants in India (2/2)
1 Saffronart 9 Amit Sarup, President of Religare's art and family office
2 Vinitadas Gupta 10 Sotheby's auction house
3 The Art Trust 11 Vaishnavi Murali, Founder – Eikowa
4 Artery India 12 Asian Contemporary Fine Arts (ACFA)
5 Mojarto 13 Art Consultant Anjali Maheshwari
6 Ajay Seth, Copal Art 14 Indian Art Consultants LLP (Founder - Aqdas Tatli
7 Peter Nagy, Director of Nature Morte art gallery 15 Astanzi
8 Amrita Jhaveri, a Mumbai-based collector and art advisor 16 Consultants at other art galleries or auction houses
Major Art Advisors or Consultants in India (random order)

21. 20
This Niche Indian Art Designing Merchandise Platform is Largely Dominated by
Three Platforms, However, New Entrants are Expected to Drive Up Competition
7
• Online design marketplaces are enabling artists to monetize content through designer merchandise and
lifestyle products and provide young artists a platform to showcase their work
• Startups such as PosterGully, Cupick and PaintCollar, which offer a platform to upload designs that can be
printed on merchandise including apparel and home decor, work on a royalty-sharing model with artists
• These companies take care of manufacturing and shipping
• Catering to an audience of 24 to 35-year-olds, the online design marketplaces earn nearly twice the margin of
horizontal ecommerce players in the fashion category
• Typically, there is a base price for every product, over which the artist adds a profit margin. The final price is
the base price plus the margin and taxes
• This covers the company’s entire manufacturing cost, packaging, delivery and profit margins
• When Paintcollar first started, their margins were at 8%, which moved to 18% as traction on the website
started rising
Source: Economic Times - How startups like PosterGully, Cupick and PaintCollar offer platform to young artists, 07 July 2015; Yourstory – PaintCollar, August 2017
"We currently get 1% of our orders from customers abroad but with our plans to tie-up with local vendors in each
country, we can scale globally and bring down the costs,"
Bharat Sethi, Founder and COO of PosterGully (July 2015)
This startup is looking to venture the global market. The company handles 3,500 orders per month and lists
800-plus artists on its platform.
"We have a just-in-time model and tie-ups with manufacturers to deliver the products. Close to 30% of the artists on
our platform are based outside India. We give artists the autonomy to choose the medium they would like to see their
designs on and they are given control of their designs and pricing.”
Justin Alva, Co-Founder of Cupick (July 2015)

22. 21
India Doesn’t Have Any Blockchain-Based Art Start-up Companies and
Initiatives, However, Following are a Few Examples From a Global Perspective
8
Source: Hiscox Arttactic Online Trade Art Report, 2018
Company Description
ArtByte ArtByte is a cryptocurrency which allows collectors to buy artworks directly from artists using ArtBytes which they can mine on artbyte.me.
ArtChain ArtChain has a bitcoin blockchain database which authenticates art by proving chain-of-ownership and providing certificates of authenticity.
Artmyn Has developed a technology around Digital Fingerprint (DNA of an artwork) through a scanning process.
Artory Building a blockchain database of artwork information.
Ascribe
Platform and online marketplace for digital artworks. Artists can upload their artworks and transfer their intellectual property to the buyers of
their artworks.
Bit2Art.com Digital platform for trading in fine art in Bitcoin and a secure storage facility, shipping and insurance consultation.
Codex Blockchain-based decentralised title registry for art and collectibles.
CryptoPunks Digital collectibles paid for with cryptocurrencies.
Deloitte
ArtTracktive
Developed in 2016 as a ‘proof of concept’ (POC) to demonstrate how blockchain could be applied in the art market.
Maecenas
Aims to issue cryptographic certificates against an artwork which, when bought, allow investors to own part of an artwork, and which can be
traded on the Maecenas exchange platform.
Monegraph The Monegraph blockchain platform allows artists to sell and authenticate their artworks.
Paddle8 Paddle8 merged with Swiss company Native to introduce blockchain-based sales and its first sale to accept Bitcoin will be in August 2018.
Provenire
Authentication
The Provenire Sticker uses synthetic DNA polymers to specifically and uniquely mark artwork.
Tagsmart
Provides artworks with ‘DNA tags’ which identify, seal and verify the authenticity of artworks, issues certificates of authenticity and an online
provenance record.
The R.A.R.E.
Network
Uses the blockchain to create verifiable scarcity for digital art prints and uses RARE Token to pay bounties to the community for flagging spam
and fraud in the R.A.R.E. Registry.
Verisart Using blockchain to create certificates of authenticity for artworks and adds provenance to a permanent, decentralised and anonymous ledger.
ZenDao
ZenDao tokenizes artworks to link them to their blockchain database designed to make the transfer of ownership and transactions quicker and
easier.

23. 22
4. Any Correlation Between the Indian and Chinese Art Market?

24. 23
0.2 1.0 2.1 2.8
6.3 5.6
7.1
13.1
19.4
14.2
15.2 15.7
12.1 11.4
13.4
1.0%
3.2%
5.8%
5.1%
9.5%
9.0%
18.0%
23.0%
30.0%
25.0%
24.0%
23.0%
19.0%
20.0%
21.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
0.0
5.0
10.0
15.0
20.0
25.0
2000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
China’sShareofGlobalArt
($billion)
China Art Market Sales China's Proportion of the Global Art Market
China Art Market Sales ($ billion) and its Proportion of the Total Global Arts Market
Unattractive other set of investment
avenues such as RE or stocks
Favorable macro factors such as
rising disposable income and HNIs
Growth primarily fueled by auction
sales in Mainland China
Primary art market growth driven by
art museums and living artists sales
Speculation questioning an
artwork’s authenticity and forgeries
Spike in the Chinese Art Market
Primarily Between 2009 and 2014 was
Driven by the Following Factors:
Contrary to Popular Belief, Factors Contributed to Growth of the Chinese Art
Market CANNOT be Compared With India, Thus, There is no Real Correlation
A
B
C
D
E
Source: Art Basel and UBS 2018 Report; MGP Research and Analysis
Apart from general macro factors such as rise in middle class population / median income levels, Chinese art market
growth stimulators are unique and specific to its own market and can’t be compared with India or any other economy

25. 24
China Business Climate Index: Real Estate (January 2000 – March 2018)
Unattractive Other Set of Investment Avenues Drove Chinese Art Market (1/2):
Relatively Low Performance of Chinese Real Estate
China’s real estate climate index fell
drastically post the 2008-09 recession
recovery indicating that RE was an
unattractive and unstable investment
avenue between 2010 and 2015.
Facilitated by credit growth and economic boom
Global financial crisis and stock
market bubble followed by a recovery
Stocks / Art / RE Market Comparable
Period: 2010-14
A
Source: CEIC Data; Capital IQ; MGP Research, Analysis, and Insights

26. 25
Shanghai Stock Exchange Composite Index (01 January 2000 – 07 May 2018)
Chinese stock market showed a downward trend post recession between 2010
and 2014. When compared to the peak of ~6,000 points in 2007, it had lost
almost two-third of its value to ~2,000 points in 2013-14. This massive crash
during this period possibly led investors to other investment avenues.
Split Share Structure Program reform was a
turning point which triggered and catalyzed
the recovery of the Chinese stock market
Note 1: Before the reform, only about one third of the shares of any listed company in the Chinese stock market were tradable. The other two-third shares were non-tradable (not allowed to be
exchanged and to circulate between investors), and were owned by the state and by legal entities. s. On 4 September 2005, the China Securities Regulatory Commission enacted the Administrative
Measures on the Split Share Structure Reform of Listed Companies, which took effect immediately.
Source: Yahoo.com; MGP Research, Analysis, and Insights
Largely controlled by government
policies and speculation
China’s latest stock market zoom
is largely fueled by debt
Stocks / Art / RE Market
Comparable Period: 2010-14``
Unattractive Other Set of Investment Avenues Drove Chinese Art Market (2/2):
Relatively Low Performance of Chinese Stock Market
A

27. 26
Favorable Macro Factors: Increasing Number of HNWIs and Their Growing
Accumulated Wealth have Stimulated Discretionary Artwork Spending in China
B
Number of HNWIs in China (in ‘000s) and % of Asia-Pacific China HNWI Wealth (in $bn) and % of Asia-Pacific
Median Wealth Per Adult 2000–2017 (in USD log scale) Ultra-high net worth individuals 2017: Top 15 countries
Source: Asia Pacific Wealth Report, 2016; Credit Suisse Global Wealth Report, November 2017; MGP Research Insights
Note: HNWIs (high net worth individuals) are defined as those having investable assets of $1mn or more, excluding primary residence, collectibles, consumables, and consumer durables
535 562
643
758
890
1,034
1,129
16.2%
16.5%
17.4%
17.6%
18.9%
20.3%
20.5%
15.0%
16.0%
17.0%
18.0%
19.0%
20.0%
21.0%
-
200
400
600
800
1,000
1,200
2010 2011 2012 2013 2014 2015 2016
Number of HNWIs in China (thousands) % of Total Asia-Pacific
$2,657 $2,706
$3,128
$3,769
$4,502
$5,261
$5,774
24.6%
25.3%
26.1%
26.5%
28.5%
30.2%
30.7%
23.0%
25.0%
27.0%
29.0%
31.0%
33.0%
$0
$1,200
$2,400
$3,600
$4,800
$6,000
2010 2011 2012 2013 2014 2015 2016
China HNWI Wealth (in $bn) % of Total Asia-Pacific
China – second only to
the US in the ultra-high
net worth individuals list
Number of HNWIs in
China grew by more than
2x between 2010-2016
Correspondingly, wealth
held by Chinese HNWIs
more than doubled

28. 27
Total Wealth in the US and Relative Position of Selected Economies (in USD trillion, constant prices)
Total wealth in India increased ~4x between 2000 and 2017, reaching $5 trillion in 2017. Despite this remarkable increase
and having ~4x the population of the US, total wealth in India is comparable to the level for the US 90 years ago. Total
wealth in India is projected to reach $6 trillion in real terms by 2022, which is comparable with the level in the US in 1936.
A Relative Comparison with the US Indicate That China’s Wealth Increased
Drastically Between 2000 and 2017 and India is Far Behind the Large Economies
B
Source: Credit Suisse Global Wealth Report, November 2017

29. 28
15
17
26
33
28
18
28
32
28
30
33
30
23
29
0.9 2 2 3 3 3
9
15
10 10 10
8 8
9
6%
11%
8% 8%
11%
16%
31%
46%
36%
33%
31%
26%
35%
33%
89% 91%
71%
44%
57%
42%
65%
77%
69%
66% 64% 64%
69% 70%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0
5
10
15
20
25
30
35
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
AxisTitle
($billion)
Global China China Art Auction Share of Global Art Auction China Art Auction Market Share of Total China Art
China and Global Art Auction Market Sales ($ billion) and China’s Share of the Global Art Auction Market
Auction Sales Account for ~70% of the Chinese Art Market; China Accounted
for 1/3rd of the Global Art Auction Market in 2017, Up from ~8% Share in 2007
• Chinese art auction market started its bull run during the 2008-09 global recession
• While sales growth for Chinese art auction between 2007 and 2009 was relatively flat, its global art auction market share
increased from 8% in 2007 to 16% in 2009; global investments in general were below par during the recession
• 2010 was a game changer year for the Chinese auction market where sales grew by ~2x y-o-y and Chinese global
market share almost doubled
• Since 2010, auction sales proportion of the total Chinese art sales have been in the range of ~65-70%. Also, since then, the
global art auction market performance has been following the trend similar to that of the Chinese market
C
Source: Art Basel and UBS 2018 Report; MGP Research and Analysis

30. 29
Share of Sales by Living Post War and Contemporary Artists in 2016 and 2017, by Both Value and Volume
63.5%
72.5% 70.0%
62.0%
71.6%
26.9%
20.1% 23.4%
29.5%
22.3%
5.7% 3.8% 2.9% 3.5% 2.3%
3.9% 3.8% 3.6% 5.0% 3.7%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014 2015 2016
Mainland China (~70% is Beijing and Tianjin Region) Other Asia (Primarily Hong Kong) Europe North America
90.4% 92.6% 93.4% 91.5% 93.9%
Total China
and Other
Asia
Mainland China (Primarily Beijing + Tianjin Region) and Hong Kong Account
for More Than 90% Share of the Total Chinese Art Auction Market
The Volume of Sales in the Chinese Auction Market (2004–2017)
2012 2013 2014 2015 2016 CAGR 2012-2016
Mainland China:
Number of Lots offered 563,915 711,965 701,977 532,447 499,260 -3.0%
Number of Lots Sold (A) 269,749 360,341 327,928 253,682 254,940 -1.4%
Sell-Through Rate¹ (%) 47.84% 50.61% 46.71% 47.64% 51.06%
Overseas:
Number of Lots offered 68,162 68,714 76,060 86,266 74,690 2.3%
Number of Lots Sold (B) 44,972 46,374 46,387 48,805 45,585 0.3%
Sell-Through Rate¹ (%) 65.98% 67.49% 60.99% 56.58% 61.03%
China Art Auction Market Sales ($ bn) 9.8 10 10.1 7.8 7.8 -5.5%
Average Auction Price of an Artwork (A+B) 31,139 24,587 26,983 25,786 25,955 -4.5%
While number of lots offered declined since 2012, sell-through rate in China has been
consistently around the 50% mark
Overseas Chinese art auction sell-through rate is typically high but has declined recently
Avg. auction price of a Chinese artwork has declined by ~16% from the peak of 2012
Note: 1. Sell through rate is the percentage of lots that sold. Rates under 80 percent are considered to be bad
Source: Global Chinese Art Auction Market Reports, 2012-2016
C

31. 30
Sudden Jump in the Primary Art Market Sales Between 2006-09 Right Before
the 2010-11 Spike in Chinese Art Market, was Largely Driven by…
China Art Market Sales ($ billion) and its Proportion of the Total Global Arts Market
1.0
2.1 2.8
6.3
5.6
7.1
13.1
19.4
14.2
15.2 15.7
12.1
11.4
13.4
89%
91%
71%
44%
57%
42%
65%
77%
69%
66% 64% 64%
69% 70%
0%
12%
24%
36%
48%
60%
72%
84%
96%
108%
120%
0.0
2.5
5.0
7.5
10.0
12.5
15.0
17.5
20.0
22.5
25.0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
(ChineseAuctionProportionofTotalArtSales)
($billion)
China Art Market Sales China Art Auction Market Share of Total China Art
While secondary market / auctions had historically dominated the Chinese art market, the years between
2006 and 2009 indicated high activity in primary market / sales driven by art galleries and museums. Our
research indicates that there was a sudden exponential growth in the contemporary Chinese art market or
the new artwork by relatively young or living artists supplied at a higher price.
Influx of contemporary or
living artists’ artwork drove
the primary Chinese art
market
D
Source: Art Basel and UBS 2018 Report; MGP Research and Analysis

32. 31
Chinese Primary Art Market Sales Demand Drivers Between 2006 and 2009
…Driven by Growth in Number of Private Art Museums/Galleries; Government
Promotion; New Generation of Art Collectors Buying Artwork of Young Artists
Data for overall Chinese art galleries and art fairs
is not available, hence considered the cultural
museums data to validate our research insight.
• China has spawned hundreds of museums, galleries,
auction houses, art fairs, and growing numbers of
contemporary-art collectors in the last decade or so
• ~20% of museums in China are private, owned by
HNIs, famous art collectors or property developers
• No. of private museums grew by~3x from 277 in 2009
to 864 in 2014, compared to a 45% growth in public
museums over the same period
• Number of museums visitors in China grew from
120mn in 2006 to ~781mn in 2015, at a CAGR of 23.1%
No. of Museums in China (by State Admin of Cultural Heritage)
8
147
21
214
349
407
1,215
1,397
1,548
2,300
2,400
2,590
2,970
3,145
3,489
3,789
3,866
4,165
4,510
1905
1937
1949
1965
1978
1980
1991
2000
2004
2005
2007
2008
2009
2010
2011
2012
2013
2014
2015
Source: China’s Museum Boom ; Number of Museum Visitors – Daxue Consulting ; MGP Open Internet Research and Analysis
“In 2007, Chinese art made up over 70% of the total contemporary Asian artworks for sale, which is the fast-growing market segment
nowadays. Prices for Chinese contemporary artworks have increased by 2,000% / 20x or more since 2004 with skyrocketing numbers
frequently making newspaper headlines. The most sought-after artists are living extravagant superstar lives. According to the Art Price
Index Chinese artists took 35 of the top 100 prices for living contemporary artists at auction in 2007.”
- Excerpts from Xuan Wang 2009 Ohio State University Thesis Titled - Gallery’s Role in Contemporary Chinese Art Market
Other Related Excerpts From the Articles and Publications Between 2006 And 2012:
• Chinese Government Facilitated the Growth in Chinese Contemporary Art Market Since Early 2000s: Since 2003, a series of
Chinese governmental contemporary art exhibitions were held in many places around the world. The government since then has been
active in sponsoring art biennales in China and the development of creative art districts in major cities
• In 2007, it was estimated that 5 of the world's 10 best selling living artists at art auction were from China, with artists such
as Zhang Xiaogang whose works were sold for a total of $56.8 million at auction in 2007
• It is interesting to note that a new generation of art collectors was emerging during this period who intended on buying
artworks by home-grown artists
D

33. 32
17%
34%
44% 45%
32% 35% 38%
44% 46% 49% 47%
52%
46%
31%
36%
29% 29%
35%
36% 34%
32% 30% 28% 31% 23%
27%
52%
30% 27% 26%
33% 29% 28% 24% 24% 23% 22% 25% 27%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Post War and Contemporary Modern Others
Global Market Share by Value of the Fine Art Auction Market: 2000–2017
• Globally, art market can be categorized by the following sections by period of creation:
1. Post War and Contemporary, defined as artists born after 1910
a) Living artists, defined as artists alive in 2017, which are analyzed as a sub-set of the Post War and Contemporary sector
2. Modern, defined as artists born between 1875 and 1910
3. Others:
a) Impressionist and Post Impressionist, which are defined as artists born between 1821 and 1874.
b) Old Masters, defined as artists born between 1250 and 1821
c) European Old Masters, defined as Old Master artists of European origin
Important point to note here is that before 2000, more than half of the market was dominated by paintings created in / before the 19th
century. However, this segment accounts for ~25% share today. While we assume that the value of the ancient artwork has not gone
down, the supply of post war / contemporary / young artists’ artwork has increased significantly. This indicates that the current art
market is dominated by artwork of those artists who have relatively less historical or cultural influence.
Source: Art Basel and UBS 2018 Report; MGP Research and Analysis
Majorly driven by contemporary and
living artists artwork
Sudden Increase in the Proportion of Artwork Sold by Contemporary (Including
Living) Artists Ascertained the Spike in Chinese Primary Art Market Sales
D

34. 33
Share of Sales by Living Post War and Contemporary Artists in 2016 and 2017, by Both Value and Volume
Sales of Living Artists by Price Bracket in 2017, Globally Share of Global Sales of Works by Living Artists in 2017
41%
32%
44% 42% 40% 41%
57%
29%
52%
32%
46% 46%
0%
10%
20%
30%
40%
50%
60%
China France UK US EU World
2016 2017
72%
56% 58% 59%
47% 50%
74%
49%
57%
62%
55% 57%
0%
20%
40%
60%
80%
China France UK US EU World
Share of sales by living post war and contemporary artists in China in terms of both value and volume has increased in 2017 y-o-y.
Living artists account for ~60% in value and ~75% in volume within the post war and contemporary artists in China.
37%
28%
31%
16%
22%
10%
3%
9%
1%
6%
1%
5%
1%
4%
4%
23%
0% 20% 40% 60% 80% 100%
Value
Volume
China US UK France Italy Germany Taiwan Others
China accounts for majority share of works
by living artists, both in volume and value
41%
27%
24%
6%
2% 1% 0.1% 0.03%0.4% 2%
10%
15%
23%
29%
9%
13%
0%
10%
20%
30%
40%
50%
Under$1k
$1k–$5k
$5k–$50k
$50k–$250k
$250k–$1m
$1m–$5m
$5m–$10m
Over$10m
Volume Value
Globally, ~75% of living artists’ artwork are sold at
a value upwards of $250k (or Rs. 1.5 crore+)
Value of Sales Volume of Sales
Note: There are living or deceased artists, to highlight living artists’ info we have provided only living artists info. It is to be noted that data for living artists share of sales in
China back between 2006 and 2010 was not publically available, hence have used the recent years data to validate the hypothesis.
Source: Art Basel and UBS Report, 2018
Supporting our Insight, the Following Charts Indicate That the Share of Sales
by Living Artists’ in China Increased Significantly
D

35. 34
• Specifically for fine arts in China, the buy-in rate was ~46% in 2017 which is substantially high as compared to
19% in the US and 28% in the UK for fine art auction sales in 2017
• Buy-in rate is the percentage of the overall lots on offer that failed to sell
• According to industry experts, there continues to be an oversupply of low quality works (alongside a chronic
shortage of supply at the top end of the market) and continuing problems with provenance and forgeries
The Volume of Sales in the Chinese Auction Market (2004–2017)
Source: Art Basel and UBS Report, 2018
Widening Gap Between the No. of Artworks Coming into the Market and Those
Actually Being Sold Since 2009 Due to Oversupply of Low Quality Artwork
D

36. 35
• As per art industry experts, it is speculated that there are rigged auction houses across China and they become the most
suitable places for elegant corruption
• The briber, first of all, gets a fake painting either from a gallery or a fake painting factory (Dafen, a village in China,
once produced an estimated 60% of all the world’s oil paintings)
• Then, he may provide relevant document proof of scholars and experts to prove the authenticity. These scholars and
experts are paid to confirm the authenticity of this fake painting
• They falsify every historical detail, evidence of painting style, and scientific verification of the materials used. The forged
painting is then given to the official as a gift and is auctioned at a very high price
• Eventually, there is always someone coming from nowhere who wins the bid. Again, the bidder is a trusted person of the
briber. These auction houses get hush money before the whole corruption process is completed
Source: Reuters - Art market datapoints of the day, China edition, 13 January 2012; BlouinArtInfo - Know Your Artist — By the Numbers: Zhang Daqian, 29 August 2018;
MGP Research
2.0 0.8 0.0 1.8 1.0 2.7 7.5 12.1 10.5 17.0 19.7
42.1
214.5
501.1
164.2
229.4
147.2 141.6
268.6
185.3
0
50
100
150
200
250
300
350
400
450
500
550
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
($million)
Zhang Daqian: Total Sales for Each Year (1998 – 2017)
Sudden Spike in Chinese Art Auction Revenue Since 2010 has Led to a Lot of
Speculations Questioning the Authenticity of the Artwork Sold and Forgeries
E
Before 2005, 90% of Zhang’s works sold for less than
$100,000. However, post that, there was a sudden rise
in demand for his artwork that led to his annual
reported sales growth of ~50x between 2006 and 2011.
Zhang Daqian and Qi Baishi (each reported ~$500mn in
2011) had comfortably beaten the total annual revenue
of Pablo Picasso (~$315mn) in 2011.

37. 36
• Though household names in China, Zhang Daqian and Qi
Baishi went relatively unnoticed elsewhere until 2011
• However, since then, sales of these two Chinese artists’
works represented between 4% and 5% of the total global
auction market in 2011
• Artificially-inflated prices and manipulated sales through
bribing government officials and money laundering have
so disrupted the values for Chinese art and antiques that
the true value of many of them remains unclear
Chinese art market indirectly dominated by the
government / strong political influence:
• Back in 2012, according to Nancy Murphy, an art lawyer
based in Beijing, fake paintings comprise ~80% of the
material offered at Poly and a fair share can also be
found at China’s number two auctioneer, China Guardian
• Poly Auctions is the auction arm of the People’s
Liberation Army (PLA). It is believed that PLA is the
most powerful organization in China, second only to
the Communist Party
• China Guardian Auctions, is owned by the politically
well-connected founder of Taikang Insurance, Chen
Dongsheng. Chen – is married to Chairman Mao’s
granddaughter
• Of the world’s top ten auction houses, six are now
Chinese – and all but one is just a decade old
• China’s presence in the art-auction market is declining due to
the government’s recent anti-corruption drive and the slowing
of the Chinese economy
Source: Forbes - China's $13 Billion Art Fraud -- And What It Means For You., 13 Aug 2012;
The New York Times - Forging an Art Market in China, 28 Oct 2013; QZ.com - These are the
two biggest-selling artists you’ve probably never heard of, 07 Oct 2016; The Diplomat -
China’s Art Market Is Booming – But Not for Foreigners, 25 Feb 2017
Chinese Painters Dominated the Art Market Since 2010
Tenth-------GrossingartistatGlobalArtAuction-------Highest
Chinese Painters Suddenly Dominated the Global Art Market Since 2010 – There
Were 6 Chinese Painters in the Top 10 Best Selling Artists in the World in 2011
E
2006 2007 2008 2009 2010 2011 2012

38. 37
• The two famous global auction houses, Christie’s and Sotheby, are limited in their ability to serve the Chinese domestic market as they are
not permitted to sell Chinese / Western antiquities in China
• Only one firm, Christie’s, was approved in 2013 to establish a wholly owned venture and conduct auctions in China
• Sotheby has a JV with Beijing-based Gehua Cultural Development Group, a state-owned multimedia company in China
• While these two houses have been granted some degree of access to the Chinese market, they are still banned from selling
‘cultural relics’ – meaning any artwork created before 1949, the year of the founding of China. It is to be noted that ‘cultural relics’
are the most profitable sales in China today. Additionally, sale of Western art and antiquities by the foreign houses is limited to post-
1949 as well
Source: QZ.com - These are the two biggest-selling artists you’ve probably never heard of, 07 Oct 2016; BlouinArtInfo - Know Your Artist — By the Numbers: Zhang Daqian,
29 August 2018; MGP Research
Zhang Daqian: Where have his Works Sold the Most in the Past 20 Years (1998 – 2017)
A Lot of Restrictions for Foreign Auction Houses to Sell Art in China; Even the
Highest Grossing Chinese Artist Reported Only ~3-4% of Sales Outside China
E
Restrictive measures are undertaken by the Chinese government to
prevent the outflow of Chinese artwork to foreign countries and
primarily sell Chinese artwork in China. China is thus a unique
controlled art market that is not really global per se and there is a
higher possibility of price manipulation & false authenticity/forgeries

39. 38
• Payment default or delay remains an ongoing issue in mainland China
• Among all lots sold in 2017, the share of the total sales value paid as of 15 May, 2018 dropped to 49%,
the lowest since 2011
• This percentage further dropped to a mere 28% among lots sold over ¥10 million (vs. 48% in 2016)
• Of the 18 lots sold above ¥100 million, only two were paid in full as of May 15, 2018
Recent Trend Towards High-End Chinese Art and Antiques Facilitated by a
Significant Surge in Artwork Pricing has Led to an Increase in Nonpayments
E
Payment Status for Lots Sold Above ¥10 Million ($1.4 Million)
Source: Artnet - Global Chinese Art Auction Market, 2017 (published in August 2018)

40. 39
Phase 2: Identification of Promising Indian Artists from a Long-Term
Investment Perspective
To be Prepared
Later

41. 40
• This document has been compiled by Maple Growth Partners (MGP) from sources believed to be reliable, but
no representation or warranty, express or implied, is made by MGP, its affiliates or any other person as to its
accuracy, completeness or correctness. Such information may be incomplete or condensed and/or may not
have been independently validated by MGP. MGP expressly disclaims liability for any direct or consequential
loss arising from any use or reliance upon this material or the information contained herein.
• Certain of the information contained herein represents or is based upon forward-looking statements or
information, which may include descriptions of anticipated market conditions and changes, and expectations
of future industry activity. Maple Growth Partners believes that such statements and information are based
upon reasonable estimates and assumptions. However, forward-looking statements and information are
inherently uncertain and actual events or results may differ from those projected. Therefore, undue reliance
should not be placed on such forward-looking statements and information.
Disclaimer
MAPLE GROWTH PARTNERS
Niraj Singhvi
Founder and CEO
+91-9930-206-207
niraj.singhvi@maplegrowthpartners.com