[YeitSuda] Crisis in the K-Art Market, There Is an Opportunity

With just over a week remaining until the opening of ‘Frieze Seoul’ and ‘KIAF (Korea International Art Fair) Seoul,’ the art world is bustling with preparations, drawing attention to whether these two major international events can become the saviors of the domestic art market currently facing a crisis.

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Last year, the art market recorded an all-time high transaction volume of 1.0377 trillion KRW, but it faced a crisis within six months due to the global economic downturn. According to the Korea Art Market Appraisal Association’s “2023 First Half Domestic Art Auction Market Report,” auction transaction volume totaled 81.1 billion KRW, only 56% of last year’s level. The bid success rate also dropped to 52%, the lowest in the past five years. The unstable economic situation led to a contraction in demand, and the market, which had initially been optimistic about a mild adjustment period, rapidly cooled down.

The chill extended to art fairs as well. Art Busan, held in May, had posted record sales of around 70 billion KRW last year, but this year, transaction volumes sharply declined, preventing the announcement of sales figures. The situation was similar for Busan Art Fair and Gallery Art Festival. Industry insiders observed that as high inflation and exchange rate trends continued, signaling a prolonged recession, investment sentiment in art?an asset with low liquidity?froze first.

The artworks of Dansaekhwa masters, which had driven the growth of the Korean art market and sold rapidly upon exhibition with long waiting lists, began showing signs of abnormality starting last year. The Seoul Auction Hong Kong auction held in November last year, which attracted attention as it was held for the first time in two years due to COVID-19, shocked the market as masterpieces by masters such as Kim Whanki, Park Seo-bo, and Kim Ku-rim were consecutively passed over. On the same day, Christie’s Hong Kong auction saw high-priced Chinese antique furniture and works by Japanese and Indonesian artists sell out completely.

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Experts point out that the failure to present notable representative works after the Dansaekhwa movement is also a cause of the crisis. While the market concentrated only on blue-chip artists, it failed to propose new themes, leading overseas collectors to complain that there was “nothing worth buying” among Korean works. This trend was clearly evident during last year’s Frieze Seoul and KIAF Seoul periods. Frieze, which showcased numerous foreign masterworks, saw open runs from the VIP preview period, and sales over the four days ranked second among the four cities where Frieze has expanded in the past 20 years, marking an encouraging sales performance, according to insiders. Although crowds flocked to the KIAF exhibition hall, the concentration phenomenon was so noticeable that industry insiders wryly commented that “KIAF puts on the show, but Frieze takes the real benefits.”

Seemingly aware of these criticisms, KIAF plans to revitalize the atmosphere this year with works by young and dynamic artists alongside 210 galleries. At a recent briefing, Hwang Dal-seong, president of the Korea Gallery Association, stated, “To differentiate from Frieze Seoul, we organized the event focusing on new works and placed emphasis on fresh programming so that those seeking young artists would come to KIAF.” Furthermore, with the anticipated participation of many Chinese ‘big-spender’ collectors who could not attend last year due to COVID-19, expectations for a successful event are gradually rising. Earlier, at Art Basel Hong Kong in March, mainland collectors resumed spending after the lifting of COVID-19 lockdowns, leading the festive atmosphere. As Seoul aims to emerge as a new Asian art capital this September with these two major art festivals, all eyes are on whether the market can turn this crisis into an opportunity.