Korea challenged as Asia's rising art hub beset by uncertainties, weak Korean won
December martial law final blow to already troubled art scene
The Korean art scene has been upbeat in the past few years, rising as an art hub in Asia with international galleries setting up here and Frieze Seoul launching in 2022. Now, the city's once-vibrant art scene faces multiple challenges as political uncertainties continue.
The heyday of the Korean art market came in 2021, when market transactions reached 756.3 billion won ($520.5 million), a 96 percent increase from the previous year. It reached its peak the following year, with the market worth an unprecedented 806.6 billion won, according to the Korea Arts Management Service's annual reports.
This was when international galleries began opening in the city, whose arrival coincided with the inauguration of Frieze Seoul.
The festive mood in Seoul was short-lived, however. In 2023, the art market began declining. That year saw 692.8 billion won in market transactions as the market responded to the economic downturn. Last year was even worse with successful bids at the country's leading auction houses falling 25.2 percent on-year, according to Korea Art Authentication Appraisal Inc. figures.
The declaration of martial law on Dec. 3 was the final blow. The hours-long martial law imposition is having a lasting effect, freezing the art market as the won declined sharply against the dollar to hover around the 1,400-won level.
The martial law was like 'pouring cold water' on the bearish Korean art market, multiple gallerists said.
'It seems things have been put on hold at many galleries -- no investment and no events. We are staying low key,' said a gallerist in Seoul on condition of anonymity.
Selection Seoul, a new art fair originally slated for a spring launch, saw its opening postponed to next year due to the weak won and declining consumer sentiment. Selection Seoul Director Kim Jyeong-yeon said that among the variables she took into account in preparing for the fair, martial law was beyond 'her imagination.'
Martial law was the "trigger" that stopped everything, according to Kim. 'You know, the market was bearable before this happened. But now, the exchange rate has become a huge problem in terms of sales and shipping," she said. "We can't persuade Korean collectors at this exchange rate to buy art," she added.
She also noted that sponsors have also turned "passive," unwilling to take risks. "Hopefully, things will be better by next year,' she said.
When martial law was declared, Director Lee Joon-yub of Gallery Shilla, had to push back an exhibition of old masters as the artists expressed anxiety.
'As a young generation, we have no experience in such a thing. We learned what martial law was only from history textbooks, (it) happened in our parents' generation,' the 35-year-old director of the Daegu-based gallery said. 'But the older artists, who experienced martial law in the 1970s and 1980s, seemed really worried and wanted to call off the plan for an exhibition," Lee said.
Recent tariff threats by US President Donald Trump have worsened consumer sentiment and weakened the Korean won against the dollar, which all work against Korea's art market.
Weak Korean won pressures international galleries
The continuing depreciation of the Korean won has hit international galleries harder as many of the artworks handled by international galleries are priced in foreign currencies. This has led to a 10-20 percent rise in the price of artwork for domestic collectors and a hike in shipping fees for exhibitions.
Between 2021 and 2023, several large international galleries set up shop in Seoul, attracted by the city's vibrant culture scene, younger collectors and a favorable tax system.
When European gallery Thaddaeus Ropac arrived in the city in October 2021, the Korean won-dollar rate was below 1,250 won to a dollar.
'The economic sentiment is not quite as good these days. Collectors are taking longer than usual to decide to buy artwork,' said Hwang Kyu-jin, the gallery's executive director in Seoul.
'The exchange rate fluctuated and moved to the 1,300-level last year, but we expected the exchange rate to settle down at some point soon. But, for now, it seems it will take longer."
Lee Young-joo, senior vice president and director of Pace Gallery in Seoul, said the purchasing power of big collectors fell strikingly starting last year, following an economic downturn.
The US gallery opened its Seoul venue in 2017 and expanded to the current 790-square-meter space in Hannam-dong in 2022.
'Economic uncertainty seems to cause people to push back purchasing art,' she said. 'What is more, the strong dollar against the won has raised the price of works traded in dollars, worsening the consumer sentiment," she said, adding buyers request large discounts to offset the rise in price caused by the weak won.
White Cube Seoul arrived in Seoul in 2023 as White Cube's second permanent gallery in Asia. The gallery said it is 'proactively' seeking solutions following the depreciation of the Korean won.
'The depreciation of the Korean won has indeed had a significant impact, especially on our domestic clients,' said Jini Yang, director of White Cube Seoul. 'But we remain hopeful for a prompt stabilization of both domestic and international condition.'
As a pioneering international gallery in the city, Lehmann Maupin in Seoul, launched in 2017, has witnessed the up-and-downs in the city's art scene, said Senior Director Emma Son. The 'exponentially' increased cost of shipping artworks this year due to the exchange rate has become a huge burden for the gallery, she noted.
'It is not just for Korea, the global art scene constantly goes through political and economic challenges. I think it is important to take a broader perspective and hold on to the belief that art has its role in the complex world.
"Things will pass for sure, and we will turn it to our advantage, taking time to figure out how we can operate the gallery in Seoul more efficiently,' she said.
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