Korean Art Market Eyeing New York and London... Bold MZ Generation Drives Growth

The transaction volume of the Korean art market, fueled by the influx of MZ generation consumers, nearly tripled in just one year. / Photo by Song Hyun-do, Asia Economy intern reporter

[Asia Economy Reporter Lim Juhyung, Intern Reporter Song Hyundo] South Korea is emerging as Asia's 'Art Hub.' In just one year, the art market has nearly tripled in size, and Seoul was chosen as the first Asian host city for 'Frieze,' one of the world's three major art fairs. Amid this, the driving force behind the growth of Korea's art industry is attracting attention as the MZ generation. In particular, the younger generation, accustomed to using artworks as a means of financial investment, has established itself as a major player in the domestic art market.

'Frieze Seoul 2022' was held for four days from the 2nd to the 5th at COEX in Seoul. This was the first time that Frieze, considered one of the world's top three art fairs, was held in Asia. More than 110 galleries with global influence participated in this Frieze, showcasing hundreds of works spanning from ancient times to the 20th century.

The event was prosperous from the opening day to the last. On the first day, even before the opening time of 11 a.m., hundreds of people crowded the venue. Art transactions were also active. Fifteen pieces were sold on the first day alone, and a private art museum purchased oil paintings worth $2.8 million (approximately 3.8 billion KRW), among other multi-billion KRW high-value transactions.

Visitors photographing Picasso's artwork at the Seoul Exhibition Hall where the 'Frieze' Art Fair is held / Photo by Yonhap News

Simon Fox, CEO of Frieze, expressed surprise at a press conference on the 3rd, saying, "Although this is the first year for Frieze Seoul, it has become the second largest in the world after its home base in London," and added, "In terms of revenue, it will surpass New York and Los Angeles."

Another major art fair, 'KIAF,' also opened on the 2nd, the same day Frieze began. Sotheby's, the world's largest art auction company, plans to open an office in Seoul this October.

The reason they are focusing on Korea is the remarkable growth rate. According to data compiled by the Arts Management Support Center (Yegyeong), South Korea's total art transaction volume reached 922.3 billion KRW last year. This is nearly three times the previous year's 329.1 billion KRW. In the first half of this year alone, it has already approached 500 billion KRW, and the total transaction volume is expected to exceed 1 trillion KRW by the end of the year.

The domestic art transaction volume had maintained around 300 billion KRW for the past decade but experienced sudden high growth starting last year. Analysts suggest that the driving force behind the current Korean art market is the MZ generation collectors. According to a survey conducted by the KIAF art fair last year, about 60% of all visitors were from the MZ generation (ages 21?40). More than half (53%) of them were first-time visitors. According to a joint survey by Art Basel, the world's largest art fair organizer, and Swiss bank UBS, 56% of global high-net-worth art collectors are MZ generation under 40.

Guests lined up to attend the 'KIAF' art fair held last year at COEX in Gangnam, Seoul / Photo by Yonhap News

The younger generation's interest in art coincided with the COVID-19 pandemic period. From 2020 to 2021, social distancing measures intensified, leading to the spread of digital transaction methods. This enhanced the MZ generation's accessibility to the art market.

The emergence of so-called 'Art-tech,' which allows purchasing high-priced artworks at relatively affordable prices, also had an impact. Art-tech is a method where multiple people share ownership of a single artwork and receive digital certificates proving their respective shares. This lowered the barriers to trading high-value artworks. According to a consumer survey on the art market released by Yegyeong on the 1st, 70% of the MZ generation cited 'investment purposes' as their reason for purchasing artworks, compared to about 30% among older generations.

Experts evaluate this trend but also voice concerns about a possible 'bubble' forming in the market. Professor Eunhee Lee of Inha University's Department of Consumer Studies explained, "Thanks to the MZ generation, the art investment boom has spread," adding, "The younger generation's interest in financial investment, the psychological superiority of owning artworks, and easier access to previously hard-to-reach art-related information via the internet are factors that made the MZ generation major players in the art world."

She continued, "However, much of this information is often exaggerated for marketing purposes, so investment profits are not guaranteed," advising, "We must be cautious to prevent excessive investment sentiment from leading to a bubble in the art industry."

This content was produced with the assistance of AI translation services.