Young collectors, new outlets help continued growth of Korea's art market

Arts & Design

Published: 10 Mar. 2022, 16:32 Updated: 10 Mar. 2022, 17:14

Young collectors, new outlets help continued growth of Korea's art market

A view of the 2021 edition of the Galleries Art Fair. The 2022 edition of the oldest art fair of Korea will kick off next Wednesday at Setec convention center in Gangnam, southern Seoul. [THE GALLERIES ASSOCIATION OF KOREA]

The boom in the Korean art market is likely to continue this year, led by young collectors and new venues for sales such as online platforms and department stores, despite the various unfavorable factors impacting the global economy. Local auction houses and galleries are trying to make the best use of this boom to widen the art collector base.

Showing the signs of the continued art market prosperity, Seoul Auction, the nation’s biggest auction house, sold about 81 percent of the artworks it offered in its first major sale for 2022 on Feb. 22. Their total value reached 17.3 billion won ($14.06 million), up 6.3 billion won from the sales at the house’s first major auction for 2021.

“Statue of Venus Obliterated by Infinity Nets”(1998), the installation of a sculpture and a painting covered with numerous dots, by Yayoi Kusama, one of the world’s most influential living artists, fetched the highest bid of 4.4 billion won. The second highest bid of 860 million won was for an oil painting by Korean modern art master Kim Whanki (1913-74) titled “Plum Blossom, Moon and White Porcelain”(1950s).

An oil painting by Korean modern art master Kim Whanki (1913-74) titled “Plum Blossom, Moon and White Porcelain”(1950s) sold at the second highest bid of 860 million won at Seoul Auction's first major sale for 2022 on Feb. 22. [SEOUL AUCTION]

Department stores turned art markets

In addition to holding traditional auctions, Seoul Auction is widening is business scope to include collaborations with the retail giant Shinsegae Department Store for the sales of artworks at the retailer’s branches. Shinsegae Gangnam in southern Seoul, one of the world’s biggest department store branches in terms of sales, has been exhibiting works by artists ranging from the famous American painter Alex Katz to young Korean artists since last year — some of which are selected and provided by the auction house. Shinsegae invested 28 billion won to buy a 4.8-percent stake in Seoul Auction last December.

K Auction, the second biggest auction house, is also collaborating with a department store. The auction house opened a six-day special art market at The Hyundai Seoul in Yeouido, western Seoul, on Tuesday. The show titled "The Collection," which runs through Sunday, offers over 250 pieces of artworks ranging from those by renowned artists such as Kusama, Chung Sang-hwa and Donald Judd to those by emerging artists for fixed prices.

“We prepared this exhibition as a lot of new collectors have joined the art market and interest in new artists has increased since last year,” K Auction said in a press release. “We hope the exhibition, held at The Hyundai Seoul, a place of hip trends, will help lower the threshold for art collecting and widen the art collector base.”

K Auction opened a six-day special art market in collaboration with Hyundai Department Store at The Hyundai Seoul in Yeouido, western Seoul, on Tuesday. The show titled ″The Collection,″ runs through Sunday. [YONHAP]

The traditional art markets — art fairs — are also taking place. The Galleries Association of Korea will hold the 40th edition of the annual Galleries Art Fair next week. Korea's oldest art fair will take place from next Wednesday to Sunday at the Seoul Trade Exhibition & Convention (Setec) near Hagyeoul station in Gangnam district, southern Seoul.

A total of 143 galleries, the largest number ever, will participate in Galleries Art Fair. They include most of the country's major galleries including Kukje, Hyundai, Gana Art, Hakgojae and PKM, as well as new participants such as Kiche, Gallery Choi and Seojung Art. Unlike Kiaf, the international art fair also organized by the association and set to be held in partnership with Frieze Seoul this September, the Galleries Art Fair features only local galleries.

The 2021 edition of the Kiaf saw a record high number of 88,723 visitors and 65.9 billion won in sales, which is more than double the sales of 31 billion won in 2019 before the pandemic. Partly encouraged by the success of the legacy art fairs, 19 new art fairs were created for last year, according to a survey by the Korea Arts Management Service. Many of them have dramatically lowered thresholds for young galleries.

For example, “The Preview Hannam,” a project by Shinhan Card’s art business team that aims to connect up-and-coming artists and galleries with novice collectors, became the talk of town in the art world, as it didn’t require the galleries to pay initial participation fees but let them pay 20 percent of their sales, up to 1 million won per work sold, to the host.

Young collectors lead growth

Art market transactions in Korea surpassed 900 billion won last year. According to the “2021 Korean Art Market Settlement” report by the state-run Korea Arts Management Service, the total sales of art pieces in Korea reached 922.3 billion won, including 328 billion won on the auction market, 440 billion won at commercial galleries, and 154.3 billion won at art fairs. In 2020, the art market reduced by 13.7 percent to 329.1 billion won in the aftermath of the outbreak of the Covid-19 pandemic. The market rebounded and almost tripled last year.

In the auction market alone, total sales reached 328 billion won last year, sharply up from 115.8 billion won in the pandemic-hit 2020 and even from the former record high of 200 billion won in 2018. The yearly sales of works by Lee Ufan, a master of dansaekhwa, or Korean monochrome painting, on the auction market stood at 39.4 billion won last year, surpassing the former record high in terms of yearly sales of 35.4 billion won set by Kim Whanki in 2018.

As Frieze, one of the world's two largest art fairs, is scheduled to be held jointly with the Kiaf, Korea’s biggest art fair, in September in Seoul, Korean art market transactions are expected to exceed 1 trillion won this year for the first time.

Hwang Dal-seung, founder of Keumsan Gallery and the head of the association, said, “Kiaf was once the No.1 art fair in Asia when it kicked off in 2002 but has now been pushed down to 6th and 7th place. But we can be reborn as Asia’s leading art market, now that Hong Kong faces political unrest, Japan has high installation costs due to possible earthquakes and China has high tariffs.”

The rapid expansion may have generated a bubble, but the Korean market accounts for only 0.02 percent of gross domestic product (GDP), compared to the art markets of other industrialized countries, which represent 0.1 to 0.2 percent of GDP, according to market insiders. In addition, Korea's game market is 20 times larger than its art market in terms of sales. Accordingly, art market still has a great growth potential.

The recent craze for art collecting as an investment is also helping the market grow. According to Citibank’s “The Global Art Market and Covid-19’ report in December, 2020, higher-value contemporary art, between 1985 and 2020, generated an annualized return of 11.5 percent, outperforming most other long-term assets including both developed and emerging market equities. The value of art is considered to be less sensitive to economic indicators than stocks or bonds.

Do Hyun-soon, CEO of K Auction, said, “The craze for investment in various assets following the increase in market liquidity due to [policies to boost the economy to cope with] the Covid-19 pandemic extended to the art market. In addition, the general public’s perception about art collection improved thanks to the donation of the Lee Kun-hee collection [part of the vast art collection belonging to late Samsung Group Chairman Lee Kun-hee was donated to the nation in 2021].”

In such conditions, the development of online markets has lowered the threshold for art collection further, leading to the increase in the number of new participants in the art market, who are in large part represented by young collectors in their 20s and 30s. According to the 2021 Art Basel and UBS Global Art Market Report, online transactions accounted for 25 percent of the worldwide art market last year, doubling from the previous year.

″Tah-Dah″ by Woo Kukwon which sold for 120 million won, four times higher than its opening bid, at Seoul Auction's sale in August, 2021. [SEOUL AUCTION]

Seoul Auction said its sales through online auctions reached 12.9 billion won in 2021, 2.5 times higher than its online sales in 2020. Among the new online subscribers for the auction house last year, those in their 30s accounted for the largest part and their number increased by 130 percent compared to a year earlier. The number of new subscribers in their 20s also increased by 120 percent. As the collectors grew younger, demand for works by relatively young artists such as Woo Kukwon and Moon Hyeong-tae, who are in their 40s increased significantly, the auction house said. Both Woo and Moon are well known for their paintings of strong colors and cartoonish forms mixed with Expressionist brush strokes.

Kim Seo-young, the Communications Manager for Seoul Auction, said, “Whereas the collectors in the older generations invest mainly in established artists’ works whose market prices are at certain levels, collectors in the so-called MZ generations [the millennials and Generation Z] just choose the works that look beautiful in their own eyes. Accordingly, the hammer will fall for such works at unexpected prices.”

BY MOON SO-YOUNG, YOO JOO-HYUN [moon.soyoung@joongang.co.kr]]