Subscription services for home appliances in South Korea grow rapidly

(MENAFN) In South Korea, subscription services for home appliances are rapidly growing, with major players targeting younger and smaller households. LG Electronics, the leading home appliance manufacturer in the country, has achieved a milestone with its subscription service, surpassing 1 trillion won (USD736 million) in sales. Samsung Electronics is also considering launching a similar service for its home appliances later this year, reflecting a trend among top companies to capitalize on this expanding market.

For 2023, LG Electronics reported impressive results from its appliance subscription service, generating sales of 962.9 billion won, marking a 31 percent increase from the previous year. When including its care service subscription, which provides regular cleaning and performance checkups, total revenue reached 1.13 trillion won. This figure represents approximately 20 percent of LG’s home appliance sales, underscoring the growing significance of subscription models in the company’s overall business strategy.

Last September, LG Electronics restructured its appliance rental service, which initially focused on small devices like water purifiers, into a more comprehensive subscription service. This expansion now includes larger appliances such as TVs and refrigerators. Choi Ji-young, an official at LG Electronics, explained that the subscription model addresses the needs of customers who are deterred by the high upfront costs of large appliances, particularly in the current environment of high interest rates. The service also appeals to those interested in trying out new devices without committing to a purchase.

The shift from a traditional rental model to a subscription service has allowed LG to attract a younger demographic, including newlyweds and single-person households, who may have been less interested in the previous rental offerings. Leveraging its experience in rental services, LG has tailored its subscription plans to offer more diverse options and benefits, aiming to meet the evolving preferences of modern consumers.

MENAFN07082024000045015839ID1108526527