'Customer Experience Management' Jo Ju-wan-led LG Electronics, SM Collaborate on Home Fitness Robot Business (Comprehensive)

Home Fitness Subscription Service App
Launching in September with Various OS Support

AI Camera Technology, TV Connectivity
Implementing Diverse Services

LG-Made IT Devices
Designed for Comfortable Use
Collaboration with SM Entertainment and Other Industries

LG Electronics held the launch ceremony of the joint venture 'Fitness Candy' in the home fitness sector with SM Entertainment on the 30th at the Conrad Hotel in Yeouido, Seoul, announcing the business vision and future plans. From left in the photo are Shim Woo-taek, CEO of Fitness Candy; Lee Sung-soo, Co-CEO of SM Entertainment; Cho Joo-wan, President and CEO of LG Electronics; Tak Young-jun, Co-CEO of SM Entertainment; and Kim Bi-o, Vice President of Fitness Candy. (Photo by LG Electronics)

[Asia Economy Reporter Moon Chaeseok]

"While the home appliance paradigm has so far focused on creating products centered on functions and performance, LG Electronics will lead the smart home appliance paradigm centered on customer experience."

LG Electronics, which has been recognized as 'Home Appliances are LG,' is shifting its focus from product specification-oriented development competition to enhancing customer experience. To this end, it has partnered with SM Entertainment (SM) to provide services tailored to customers' wellness (physical, emotional, and social health) and lifestyle. This is interpreted as aligning with LG Group's management direction, which is improving its business structure through advanced industries such as robotics (BS) and eco-friendly clean tech businesses in automotive parts (VS).

On the 30th, at the launch ceremony of the joint venture 'Fitness Candy' in the home fitness sector with SM Entertainment held at Conrad Hotel in Yeouido, Seoul, Jo Joo-wan, President of LG Electronics, stated, "We aim to transform into a company that provides 'smart life solutions' for a leading life," adding, "To achieve this, we will fill in the gaps through collaboration with specialized companies in completely different fields." He further emphasized, "At Fitness Candy, the joint venture with SM Entertainment, LG Electronics' technology-based platform construction capabilities and software (SW) development capabilities will meet SM Entertainment's content and services to provide differentiated home training services."

The newly established Fitness Candy will have LG Electronics holding 51% of the shares and SM Entertainment holding 49%. Fitness Candy plans to create home fitness-related content and devices and operate a subscription service-based app. The application (app), expected to be launched as early as September, will be installed on various operating systems (OS) such as LG Electronics' smartphones and smart TVs.

In particular, LG Electronics plans to connect its artificial intelligence (AI) camera technology to TVs to implement various services. For example, when selecting workout content featuring model Han Hye-jin, an ambassador for Fitness Candy, on the TV app, the AI camera technology will provide a service that checks how similar the user's posture is to the model's. In the future, development of strength training equipment, indoor bicycles, smart bands, etc., utilizing AI, big data, displays, and motors is under consideration.

Notably, this business is led by the 'enterprise-wide' division that manages the entire company, not by LG Electronics' BS division. Since most of the Fitness Candy business operates within LG's home appliance system linked to AI, it can also be seen as aligned with LG Group's robotics business restructuring. All of this management is led by President Jo, who is both the CEO and CSO (Chief Strategy Officer) of LG Electronics.

President Jo's idea is that LG can collaborate with completely different industries like SM Entertainment so that customers accept IT devices made by LG without resistance. Of course, the Fitness Candy business and collaboration with SM Entertainment proceed within LG Electronics' OS. In other words, the existing H&A (Home & Appliance) business, which LG has been good at, can be sufficiently integrated into the BS business, and this is being led by the CSO.

An LG Electronics official said, "Fitness Candy should be seen more as a new business than BS, and the entire company is leading the business," adding, "Since President Jo's appointment at the end of last year, the CSO part has been actively promoting new businesses and company-in-company (CIC) initiatives, and results such as the Fitness Candy home fitness business and electric vehicle charger business are gradually emerging."

Meanwhile, Kim Bi-o, Vice President of Fitness Candy, who attended the briefing, said, "Our goal is to gather paying members rather than just subscribers," adding, "The target sales are 10 billion KRW next year, 100 billion KRW in 2024, and 500 billion KRW in 2025, with paid subscribers targeted at 50,000 next year, 300,000 in 2024, and 1 million in 2025."

Fitness Candy emphasized that this business is clearly beneficial for both LG Electronics and SM Entertainment. Especially from LG Electronics' perspective, it will be an optimal collaboration to fill the gap in content compared to its device manufacturing capabilities. Fitness Candy CEO Shim Woo-taek, who attended the event, explained, "LG Electronics was preparing various businesses targeting the home fitness field, and SM Entertainment was expanding content not only in music but also in MCs, talents, and sports stars from an intellectual property (IP) perspective," adding, "There are gaps between LG Electronics and SM Entertainment, especially LG Electronics had shortcomings in filling content."

Fitness Candy plans to sell products mainly based on subscription devices. The service will be offered at around 20,000 to 30,000 KRW per month. Regarding competition with Apple's 'Fitness Plus,' the strategy is to differentiate by adding entertainment rather than focusing solely on exercise. CEO Shim said, "Unlike Apple, Candy plans to create entertainment, challenges, and documentary-style content," adding, "We will fully attempt music, dance, or genre (content production), and we believe there is a possibility of success."