Painting The Town Red
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
After witnessing its free fall post 2007, that is, during the global economic meltdown, the Indian art market’s (around 80 percent of which comprises of paintings) gradual revival from 2010 onwards is now buzzing more than ever.Thanks to the boom in the number of Indian art fairs, exhibitions, museums and international recognition for young Indian artists. Leveraging the upswing are a few artistic entrepreneurs offering marketplace platforms for painters and buyers to expand the reach of Indian art beyond the elite club of buyers.
Drawings, photographs, digital prints, sculptures, artifacts, printmaking, etc., makes up for the rest of the art market where these handful of startups have mushroomed even as paintings remain their biggest or the only product category. Nonetheless, the larger crowd of online start-ups is around artwork on clothes, handicrafts, laptop and mobile skins, wall and home décor items, etc., often brought under the common art work umbrella.
While the market size of $200-300 million as per various market estimates isn’t large enough, the scope is quite wide with every hotel, office, airport, hospital, and even school, college, railway station or for that matter every other public and private building can be prospective B2B customers while every Indian household, that is B2C, being an even bigger market.
A typical marketplace model, these start-ups help artists and buyers bridge the inefficiencies in the traditional market of discovering and buying quality paintings across different price points (less than Rs 1,000 to Rs 1 lakh or above).
The start-ups take a standard cut as their commission from every sale or it varies on the basis of the price (decided by the painter) and size of painting. Then there are other streams of revenue, including giving paintings on rent to hotels and large organizations fora set period which are then replaced with new ones on a cyclical basis.
“We offer around 10 paintings priced Rs 75,000 – Rs 1 lakh on rent to hotels for a period of six months. Paintings below that price bracket will not make sense to rent as the six-month rental will be at par with the painting’s actual price,” says Shravani Vatti who launched Pune-based Ardizen after graduating from Birla Institute of Technology and Science, Pilani in 2012.
Apart from the on-rent model, start-ups also offer paintings on demand. Kolkata based Artmikado founded by Kshitij Gakhar, with private equity and merger & acquisition background, in January this year offer on demand replicas of pictures sent by users as paintings made by artists on its platform. The service, however has a premium tag.
“We show the picture of which the customer’s wants the replica to few artists depending upon the medium like oil or acrylic to be made on canvas, paper, wood, etc. that customer wants. The quotes from
those artists are then shared with the customer who can then choose which artist to go with,” says Gakhar.
Among these online marketplaces is a Hubli-based hybrid start-up Artwaley, started by Priyal Ostwal, a painter herself, in February this year that retails paintings offline as well through its own exhibitions. The start-up raised seed investment of Rs 25 lakh from Tejraj Jain, Chairman at Jain International Trade Organization (trade body for entrepreneurs and professionals from Jain community) for a five percent equity stake this year. Part of the amount is used to organize such exhibitions.
“We do shows and exhibitions to offer customers touch-and-feel experience and for artists to educate and expose them to online platform. We did local exhibitions near Hubli and Bengaluru costing Rs 50,000-80,000. We even have two franchisees, one in Mumbai and another in Dubai as Artwaley Gallery,”says Ostwal who is currently an incubatee at Sandbox Startups’ incubation centre in Hubli. The start-up also offers corporate gifting, on-demand and on-rent service.
Switching gears towards photography, Mahesh Nair launched PicsDreamin November 2015 as India’s only marketplace for photographers to sell photographs as wall décor, with himself being the full time photographer since 2005. The aim was to give a commercial sense to photographs.
“Over the years, I witnessed people buying quality photographs as wall décorin both B2B and B2C space, and that was one of the reasons for launching PicsDream,” says Nair. The start-up raised angel funding in April 2016 from Raman Roy, CMD, Quatrro Global Services, Ankit Nagori, former CBO, Flipkart and Harish Natarajan, Ex-MD, Bausch & Lomb India.
“From specialty vertical perspective, such marketplaces is a brilliant businesslike furniture, and eyewear verticals in terms of curation, user experience, etc.,” says Nagori.
Unlike other e-commerce companies which sell goods and services at price points starting as low as Rs 100 and have frequent and multiple repeat purchases, painting marketplaces sell paintings relatively at a premium price point, from Rs 5,000 to Rs 40,000. So, while the sales volume remains low due to the nature of the product, the gross merchandise value is higher. Also, since there are no big offers or steep discounts, the unit economics too is healthy.
“Other e-commerce marketplaces offers deep discounting and have a very marketing-heavy model. They offer standard products and have standard buyers for that,” says Vishal Singhal who launched Mumbai-based ArtZolo with his wife Preeti Singhal in January 2014. The start-up has seen repeat purchases in a period of six-12 months. He adds,
“You can’t expect daily hundreds of orders for paintings. Even if you sell a few hundred annually, it is great for both start-up and artists. Though it is a much smaller business in terms of transactions, but the value it will create will be pretty big. So, unit economics would also be good.”
The prices of the paintings are either decided by the painters themselves or along with the marketplace and is often negotiable for paintings in the upper price bracket. Also, start-ups take care of display of the paintings in terms of clicking pictures, uploading them and providing captions.
“Negotiations can happen where in user can get in touch with us with his/ her price and based on what the artist suggests as the reduced price, the user can buy it as eventually we want the artist to sell the painting,” adds Gakhar. These start-ups have outsourced delivery to logistics companies like DTDC, FedEx, and Blue Dart with two-seven days of delivery time. For most of them, there have been no returns or less than one percent of the total paintings sold so far. Moreover, either there is no cash on delivery option or only available for deliveries below certain price for e.g. Rs 20,000 because of high logistics costs of being a high value product and hence, start-ups want customers to be assure of what they are buying beforehand.
Trials and Tribulations
There are a few market challenges that these start-ups come across. First, to educate and instill faith in people about buying art online, which every sector such as retail, finance, healthcare, etc., went through in their transition to online medium. Second, to convince artists particularly the acclaimed lot to sell their work online, due to their inhibitions in terms of duplication or it being treated as any other e-commerce commodity.
“Customer education is challenging.They are not sure whether they want to buy paintings or want to see it physically before buying it.This happens with every new market. So, it is just a matter of time for that to change.
Also there are many people who buy paintings without going through its details like who is the artist or how the painting has been made. This is particularly important for art collectors or who want to invest in art. This is what online marketplaces like us are changing,” adds Singhal. ArtZolo has a ‘wall view’ feature, a preview of how the painting would look on the wall.
Further, the market has cheaper paintings from China, which impacts in both single unit and bulk buying cases by those who have little appreciation about the original Indian artwork.
“Most of the duplicate art from China is machine made. There was a hotel which wanted around 100 paintings, but they bought the similar paintings at less than half of the total amount that we quoted,”
“India and China art market were similar by early 2000, wherein India market was around $70 million and China market was around $120 million in size. But, when Chinese GDP grew by 8-9 percent, it became the world’s biggest art market. However, now in India with more disposable income and spending power of people, the market will replicate China market. So, there would be huge growth in the Indian art market in next 10 years,” concludes Gakhar.
This article first appeared in the Indian edition of Entrepreneur magazine (June 2016 Issue).