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Korean Art Market, Expected to Reach 1 Trillion Korean Won

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The Korean art market has maintained its scale about 300-400 billion Korean won even during the ongoing pandemic in 2021. In line with the recovery of the art market worldwide, Korean art market has come to implement the following: ① development of a viewing room and the online expansion launching e-commerce and various platform services, ② accommodation of new technology such as blockchain, NFT, metaverse, ③ value increase in appreciation and collection of art as its investment value increases, ④ following the strict rules of COVID-19 prevention measures. With these new implementations, fast reaction and activity of the players in the art market, such as the art enthusiasts, and collectors, towards the new social phenomena have culminated into the growth of the Korean art market, which estimates about 915.7 billion won that is larger than the scale of 600 billion won in 2007.¹⁾

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This growth has continued to this day, and the estimate amount of the first half of 2022 is 532.9 billion won.²⁾ In general, along with the time series data element of the second half of the market being larger than the first half of the year, there are many other elements that would contribute to the growth and success of the art market. Those are ① active activities of the MZ generation, the new center of the cultural ecosystem, along with existing enthusiasts and collectors, ② Expansion of digital art, ③ Expansion of famous overseas galleries, auction houses, and art fairs having an outpost in Korea, ④ entry of other industries, such as the realm of distribution, fashion, and finance, into the art market. Given such various causes, there is an anticipation that the market could reach the size of 1 trillion won, an estimate that is even higher than that of the year before.

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[2008~2022 Scale of Korean Art Market ∥ Unit 1 million KRW]

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Concerns and Expectations of the Korean Art Market

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According to the results of “Survey on the trends of the art market in the first half of 2022” conducted by the Korea Arts Management Service with representative figures of major local galleries, art fairs, and auction houses, the performance in both the first half of the year and the outlook for the second half of the year was assessed to be “deteriorating,” “stagnant” and “enhancing” at the same time. This result indicates that there are mixed concerns about the possible decline and reorganization as well as the anticipation about continual growth amidst a rather sharp rise in the year 2021.
However, the future outlook for the domestic art market accounts for a high proportion of positive opinions. This appears to be a cautious sentiment that the past experience of not being able to respond to a crisis, which happened in the past by simply following the numbers of sales during a booming market, will not happen again. It is interpreted as the result of expectations that it will become an important starting point for Korea to leap into the global standard market while strengthening the fundamentals amid new changes.

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[Major Result for 2022 Korean Art Market Trend Assessment ∥ Unit %]

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The Growth of Art Fairs

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As the auction house sales was the main cause of the art market’s growth in 2021, art fair has become the main cause that is driving growth in 2022. This is immediately detectable with the open runs and the long lines that appear in the art fair entrances in Seoul, Busan, and Daegu. Starting with Galleries Art Fair, the six major art fairs that took place in Korea resulted the total sales of 149.2 billion won, a 165.6% rise compared to the previous year, and 3.63 million visitors, which is a rise of 1 million from the highest record in the past.

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In particular, as a new art fair in its second year, “The Preview Seongsu” attracted wide attention from the participation of many artists and “hot place” galleries. “Art Fair Daegu” was also successful in its sales and attendance number. Considering that Daegu has been the city that was absent of big scale art fair despite its art historical significance and size of its art market, this successful result was unprecendented and proved the potential growth of local art fairs.

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In the second half of this year, Frieze Seoul, the first global art fair to be held in Korea this year, along with KIAF are in preparation. Also, a new type of art fair aimed for the MZ generation and Visual Artists Market, a market for direct sale between the artist and the collector, will be held across the country. With the news about these diversification of art fairs, it is expected that the growth and expansion of the art market will continue.

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Auction Market on Stagnation

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In the first half of 2022, major auction houses that take up over 80% of the entire auction market have shown a stagnant growth pattern after the steep rise in the second half of 2021. There was only 0.1% rise this year compared to the same period of the previous year.

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However, due to the spread of collectors who have gotten used to the convenience of purchasing art online due to the pandemic and the active participation of the MZ generation in the art market, the performance of auction houses specialized in online activities, such as RAIZ ART and Herald Art Day, has increased. Also, mirroring the growing interest in traditional art and antiques due to the popularity of Lee Kun-Hee art collection, auction houses, such as MYART Auction, I Auction, and Kan Auction, have experienced increase in the sales of such art.

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Diversification of Artists and Some Threatening Factors

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What is noteworthy about the growth of the Korean art market is the change in the artist. Korean Blue Chip Artists such as Lee Ufan, Kim Whanki, and Park Seo-Bo, and international artist such as Yayoi Kusama have long been ranked at the top of the list for the highest price and total amount of winning bids of their work. But there has been a changing trend detected since last year.

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In the realm of online auction, artists such as Ayako Rokkaku, Choi Myoung Young, and Youn Myeung-Ro, who were not previously seen in the top rankings of successful bids, first appeared in the list. Also, the results of auction transactions of several artists, such as Ayako Rokkaku, Chun Kwang Young, Shara Hughes, Ugo Rondinone, Kim Jeongho, Adam Handler, Chungshin, Qwaya, and Lee JongKie, in the first half of 2022 have already surpassed the total number of transactions in 2021.

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Besides, works of mid-level and higher-level artists representing Korean modern and contemporary art such as Nam Tchun-Mo, Shim Moonseop, Rhee Seoundja, and Kim Kulim, and of the young emerging artists who gained attention from the MZ generation, such as Maria Chang, Qwaya, yislow, and Kim Heesoo, as well as that of international artists such as Adam Handler, Alex Katz, Javier Calleja, Ugo Rondinone, have been traded, diversifying the market involved with the Korean auctions, which have been concentrated on certain artists, genres, and works.
In particular, works by the hottest artists in the Korean art market, such as Chungshin, Qwaya, Moon Hyeongtae, Sunwoo Kim, Kim Heesoo reached the rate of over 95% in securing the bidding. Also, artists such as Ha TaeIm, Shin Heung Woo, and Shiota Chiharu are showing highly successful bidding rates, which is a phenomenon that confirms the change driven by the MZ generation in the art market.
However, there is a rather uncomfortable fact behind this emergence of new artists and sales growth in the auction market.
Based on the current year, the number of entries in the auction market for works produced within the past three years was very small, reported as less than 5% of the total. Since 2021 when the market has shown an upward growth, the market share that was previously 22.9% has now increased up to 32.8%. This is a trend that is similar to the that of 2007, when the art market was in its peak.

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This said, the current boom in the market could be interpreted as a consumption mostly due to investment purposes rather than cultural appreciation through purchasing and collecting art.

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In the end, this phenomenon could become a threat to the stable and healthy growth of the art market as it becomes impossible to protect the price from a possible market decline. The artistic value may become a mere backdrop of the investment value. This is the crucial time that the art workers, artists, and collectors should realize and adhere to the basic principles of the market.

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¹⁾K-ARTMARKET_2021 Korean Auction House Assessment Report (https://www.k-artmarket.kr/member/board/Promotion_BoardList.do)
²⁾K-ARTMARKET_Korean Art Market for the First Half of 2022 (https://www.k-artmarket.kr/member/board/Promotion_BoardList.do)

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