Fan Company Making Dryers, Rice Cooker Company Making Induction Cookers... What’s Happening in the Specialized Home Appliance Industry?

Shinil Launches Stand-Type Hair Dryer
Cuckoo Targets Induction Range Market... Sales Up 131%
Growth Limits in Key Items and Durable Products
Attempts to Transform into Comprehensive Home Appliance Company with New Product Launches

[Asia Economy Reporter Kwak Minjae] Small home appliance companies that have built their reputation over decades with a single product, such as fans and rice cookers, are attempting to transform into comprehensive home appliance companies. This is because the urgency has grown that relying solely on their main product limits growth. Paradoxically, the fact that they have made durable products strong enough to earn the reputation of being strong small businesses has also accelerated the limitations on growth.

According to the home appliance industry on the 16th, Shinil Electronics, known as a leader in fans, recently launched a stand-type hair dryer. This is the first time the company, which has mass-produced and sold fans since 1964, has released such a product. The product features hands-free use during operation. It also applies a 'Pet Care Mode' for use with pets. For dogs, which have hearing four times better than humans, and cats, which detect high-frequency noise, the product finds the optimal frequency range to reduce pet stress, implementing low noise averaging 41.8dB (decibels). A Shinil official said, "We plan to break away from the fixed image of a fan company and the stereotype of 'Shinil = seasonal appliances' by launching various new products such as food waste disposers and stand-type dryers to leap into a comprehensive home appliance company."

Cuckoo, which holds more than 70% of the domestic electric rice cooker market, is rapidly transforming into a comprehensive home appliance company by releasing more than three new products annually, including induction ranges and cordless vacuum cleaners. The field that Cuckoo recently considers a strategic product group to replace rice cookers is induction ranges, actively targeting the market by introducing various products such as single-burner induction cookers equipped with probe thermometers. According to Cuckoo, sales of induction ranges recorded up to October this year increased by 131% compared to the same period last year.

These companies, famous for their fans and rice cookers, are aggressively pioneering new markets because the home appliance market itself is freezing due to rising prices and economic recession. According to the National Statistical Portal (KOSIS) of Statistics Korea, the cumulative current amount (total sales) of domestic home appliances up to the third quarter of this year was tentatively estimated at 23.12 trillion won. This is about a 2.7% decrease compared to 23.76 trillion won last year. Except for the first quarter of this year, the second quarter (-3.7%) and third quarter (-3.9%) both showed negative growth compared to the same period last year. The outlook is that the home appliance market downturn will deepen next year as well. This is because the high interest rates and economic recession have caused a sharp decline in housing transactions and a slump in the real estate market, which has also affected the home appliance industry, a downstream sector. According to the Ministry of Land, Infrastructure and Transport, the nationwide housing sales volume from January to September this year was 417,794 cases, which is half compared to the same period last year (818,948 cases).

The fact that products such as fans and rice cookers, which earned the reputation of strong small businesses, are all durable goods with long replacement cycles also led these companies to transform. Their strong durability lengthens the purchase cycle, which in turn lowers the demand for new products of the same item. Shinil conducts strict quality control at both the product manufacturing and shipping stages according to its 'quality-first' principle. Products about to be launched undergo approximately 400 to 500 hours of test operation. They go through a rigorous process including professional product testing assuming customer inconvenience situations such as shocks and noise, earning consumer trust enough to hold the number one market share in Korea.

Professor Eunhee Lee of Inha University’s Department of Consumer Studies said, "Since fans and rice cookers from companies like Shinil and Cuckoo are durable goods with long replacement cycles and recognized quality, the movement to launch new products that provide differentiated brand experiences to customers will continue to increase."