A cautious look at the exploding art market in South Korea
Looking closely at the art market in Korea reveals significant patterns in what collectors buy and why – as well as some ominous signs
At the time of writing, in September 2022, the art world has been doing some ‘Seoul searching’ (sorry, we couldn’t resist). The launch of Frieze Seoul follows the opening of Korean outposts by a slew of European and American galleries over the past few years, including Pace, Perrotin, Ropac and Various Small Fires.
There are a few obvious reasons for this, much written about. Seoul provides galleries with the opportunity to access Asian collectors without the current risks of setting up in Hong Kong. Rent is also cheaper than in Hong Kong. There’s no import duty and there is no capital gains taxation on works under $45,000 nor on works by living artists. Furthermore, Korea already has one of the richest histories of art in the region, and a long tradition of collecting.
Most importantly, however, the past three years have seen a phenomenal surge in Korean collectors actively buying art, particularly young collectors buying works by ultra-contemporary artists. Art sales in the Korean art market were 922.3 billion won ($688m) in 2021, compared to 381.2 billion ($285m) in 2019 (according to a report by Korea Arts Management Service).
As the international art world, collectors and galleries turn their attention towards the peninsula, it is crucial to understand the underlying incentives driving Korean collectors, as well as what it is that local collectors actually like to buy.
In order to gauge the activity and prevailing tastes of Korean collectors, Critical Edge began by studying the lots offered for sale at Korea’s two main auction houses, K Auction and Seoul Auction.
Prior to 2021, the two houses consistently offered around 1,500 works of art per year. In 2021, that doubled to just over 3,000 works. The growth was particularly concentrated in works of art made since 2000 – these have gone from 350 a year in 2017 to 1,356 in 2021 to almost 5,000 projected by the end of 2022.
Looking at the top 100 artists who most frequently appear at auction, clear groupings appear, giving an indication of where demand lies within the Korean market.
Korean artists account for around 85% of works offered. This group is still dominated by traditional modern Korean masters, mostly associated with the Dansaekhwa (‘monochrome painting’) movement. Top among them are internationally known figures such as Lee Ufan, Kim Tschang-Yeul, and Park Seo-bo. Just those three artists make up 15% of works offered at auction. But there is also a younger generation of Korean artists, such as Kim Sunwoo, whose dodo-filled landscapes and NFTs have been gaining traction among young Korean collectors.
In terms of non-Korean artists, there is a clear demand for international brand or ‘blue-chip’ names. These are artists who have, for better or worse, often broken through to become ‘must-haves’ for new collectors. Think Yayoi Kusama, Alex Katz, David Hockney. But more surprisingly there are also contemporary artists not from South Korea, who remain proportionally unrecognised in their own countries. Take for instance Edgar Plans, whose cartoon and graffiti-inspired work sells mostly in auctions in Hong Kong (32%) and South Korea (17%) – with only 3% of auction sales in his native Spain.
The younger Korean and non-Korean artists in these sales represent a shift in generation but also a shift in aesthetics. Far from the monochrome aesthetic of the modern masters, the taste among young Korean buyers appears to slant towards the colourful and cartoonish. Take for instance the Spanish Javier Calleja, one of the most-sold Western artists at auction in Korea, whose drawings, paintings and installations are inspired by toys from his childhood. See also the Japanese Ayako Rokkaku, whose brightly coloured works are inspired by Japanese ‘kawaii’ or ‘cute’ culture. Her fellow countrywoman Maki Hosokawa’s paintings are similarly populated by cartoonish characters with oversized eyes – fun and joyful pastiches of well-known scenes from art history.
The growth in ultra-contemporary art, Korean and non-Korean, has been driven by a massive generational shift in the collector base, bringing with it different incentives for buying art compared to previous generations.
Over the past two years, an important trend among Koreans has emerged: FIRE (‘financial independence, retire early’). This has resulted in an aggressive passion for exponentially increasing personal wealth as fast a possible. In October 2021, The Korea Herald reported that ‘80% of young Koreans were currently investing in stocks, funds, cryptocurrencies and other assets’, often taking on significant amounts of household debt.
Many new art buyers are driven by the perception that art is a good investment. ‘The craze for investment has extended to the art market,’ commented Do Hyun-soon, CEO of K Auction, in the Korea JoongAng Daily in March.
This incentive has not gone unnoticed by the international dealers deciding what to offer the local market. ‘We’re not coming in with blue-chip artists. We are introducing them to [artists] they might have seen on Instagram,’ said Esther Kim Varet, founder of Various Small Fires, in Ocula Magazine in October 2021. ‘Koreans are very smart about understanding trends, and they tend to want to be early.’
However, since 2021, the Korea Stock Exchange KOSPI Index has fallen 23.4%. Cryptocurrencies have either drastically fallen in value or, in the case of South Korean-founded Terra Luna, collapsed altogether.
This leaves a great deal of uncertainty around Korea’s newfound place in the art market. To some extent, the international art world is still testing seeing which artists will ‘stick’. This month at Frieze Seoul, Ropac will test appetite for Anselm Kiefer, Pace will do the same for Adrian Ghenie, and Various Small Fires will try Diedrick Brackens. These are three artists a world away from colourful, cartoonish aesthetics that have dominated the ultra-contemporary art sales in the past two years.
But it is also worth remembering that the recent boom in the Korean market has, in no small part, been due to younger collectors wanting to make a quick buck, something the art world doesn’t tend to like that much. And when this young collectors find out that art is a terrible investment, the house of cards might come crashing down fast.