South Korea’s two largest art auction houses are expanding through new projects that go beyond the auction business.
On April 20, K Auction announced that they will be acquiring a site worth 38 billion KRW (approximately $ 310 million USD) nearby the company’s headquarter building in Gangnam, Seoul. K Auction will take over the site on May 30 to create an exhibition space and arts and cultural complex for video art, media art, NFT art, and editions as well as expanding their storage facilities.
“K auction is not merely looking for sales growth. We are also seeking to contribute to the Korean art market’s qualitative development, and we are planning to make this happen through various other activities, such as creating a sustainable art market and finding and promoting young artists,” said one of the members of K Auction.
Through its subsidiaries, K Auction will be expanding its business area by developing its advisory services for artists and building a non-fungible token (NFT) art platform.
The company currently runs three subsidiaries: Arte K, ArtNative, and Arte Crypto. In 2020, K Auction’s subsidiaries, which provided art financial services, returned their loan business license to reach out to other art business areas.
Arte K focuses on discovering young and potential artists and providing advisory services for these artists. ArtNative works on building networks with private sales departments at international art auction houses and major international galleries to introduce works by established Korean artists and consign artworks.
With Arte Crypto, K-auction aims to expand its business area by collaborating with other companies. In March, Arte Crypto became one of the partners that will work on the arts division to design a business model for DOSI, an NFT platform by LINE NEXT Inc., which is a subsidiary of LINE Corporation, an international mobile messenger app company.
Arte Crypto has also invested a stake in Art Together, an art investment platform that provides fractional investing for artworks, and they will be working together to develop IT and security systems necessary for online sales of artworks.
Earlier this year, K Auction got listed on the KOSDAQ listing, a trading board of the Korea Exchange, for business expansion. K Auction’s competition ratio for the general public offering was 1,408.33 to 1, drawing keen investor interest.
Seoul Auction, which has been listed on the KOSDAQ since 2008, also has been actively working on branching out in other art businesses in recent years.
Seoul Auction Blue, a subsidiary of Seoul Auction, jumped into the art financial technology industry and launched SOTWO, a platform for fractional investing for art in 2020.
To expand its artist base and to launch NFT businesses, Seoul Auction signed a memorandum of understanding (MOU) with KRAFTON, Inc., a collective of independent game development studios in February. KRAFTON has made equity investments in Seoul Auction Blue ($2.5 million USD) and XBYBLUE ($4.1 million USD).
Through this partnership, KRAFTON’s Bluehole Studio will create and sell NFT avatars, and Seoul Auction Blue and XBYBLUE will be working on product planning and promoting the NFT products and managing KRAFTON’s IP.
Seoul Auction also received an investment of 28 billion KRW ($22 million) from Shinsegae Group in late 2021 and they will work together with art-related businesses, such as art sales.
There are about ten auction houses in Korea, and Seoul Auction and K Auction are the country’s top two art auction houses. According to the Korea Art Market Appraisal Association and K-Artprice, as of 2021, Seoul Auction and K Auction accounted for 50.6% and 41.3% of the market, comprising a combined 92% of the art auction market share.