Why Is LG Electronics Trying to Become Younger?

LG Electronics is creating a youthful corporate image by mobilizing an expanded lineup of innovative products, marketing targeting the MZ generation (Millennials + Generation Z), organizational culture improvements, and changes in brand identity. Many in the industry attribute LG's pursuit of image transformation to its withdrawal from the mobile phone business.

LG Electronics lost its 'youthfulness' when it exited the mobile phone business in April 2021. With mobile phones gone, its main products became limited to TVs, refrigerators, washing machines, and air conditioners, which mainly gave the brand an image that might only interest mothers. The British BBC first started broadcasting in 1929. In other words, TVs appeared about 100 years ago. Other home appliances are also mature businesses. In contrast, mobile phones first appeared in the 1970s. The world's first smartphone, the IBM Simon, appeared in the 1990s.

In fact, LG Electronics' global brand awareness is considered to be undervalued relative to its business scale. LG Electronics, which has established itself as the world's largest home appliance company by surpassing Whirlpool in the global top 100 brand rankings compiled by Interbrand, the world's largest brand consulting group, does not appear on the list. Samsung Electronics ranks 5th globally with a brand value of $87.7 billion (approximately 124.5 trillion KRW). Hyundai Motor Company (35th) and Kia Motors (87th) also made the top 100, but LG Electronics is outside the ranking. In the 'Best Korea Brand' rankings, a league of Korean companies, LG Electronics fell outside the top 5 with a brand value of 3.4328 trillion KRW, far behind Samsung Electronics, which leads domestically with 85.1497 trillion KRW, a difference of several tens of times.

The background for LG Electronics' recent various attempts to expand contact points with younger customers is related to this. First, efforts are underway to introduce product lines that can attract younger consumers to fill the gap left by mobile phones. The MoodUp refrigerator, which allows users to change colors according to the atmosphere and opened the wallets of young people, is a representative example, as refrigerators were previously products that only newlyweds or mothers would open their wallets for. LG also launched the LG HomeBrew, a craft beer maker, and targeted young people who collect limited-edition shoes even at high costs by releasing shoe care products such as the shoe case and shoe care devices.

The marketing focus is also aligned with younger generations. LG released a limited edition of the new laptop 'LG Gram Style' in collaboration with the popular girl group NewJeans, and opened 'Geumseong Arcade' and 'Jaemi,' online playgrounds for laptop users, to attract young customers by allowing them to enjoy and understand products in a fun way.

Since his appointment in December 2021, President Jo Joo-wan has been leading the 'REINVENT' project to inject youthfulness and dynamism into LG Electronics. After unveiling and implementing 11 REINVENT LG Electronics guides aimed at improving internal organizational culture, employees have commonly evaluated that the organization has become younger.

Since incorporating the REINVENT project into organizational culture in May last year, an internal survey showed that more than half of the employees are well aware of the REINVENT guides and agree with the necessity and direction of change. Responses included, "The direction of change is perfectly suited for collaborating with the younger generation these days," and "Opinions are being raised bottom-up rather than top-down." Since last month, LG Electronics has also been attempting to change its honorific system by reflecting the needs of MZ generation employees, allowing them to freely choose and use horizontal forms of address such as 'nim,' 'pro,' or English nicknames regardless of rank, age, or years of service. Additionally, the LG Twin Towers, completed in 1987, are being remodeled. The work to make the 46-year-old building's interior as clean and vibrant as a newborn baby is nearing completion. Youthfulness and dynamism have also been added to the brand identity. Considering the younger generation familiar with online environments, eight motions expressing winks, greetings, surprise, and more have been added to the brand symbol, the 'Face of the Future.'