LG Electronics Home Appliance Subscription Business Achieves Record Q1 Sales

Subscription Business Revenue Hits 345.6 Billion KRW in Q1 This Year
72% Increase Compared to Q1 Last Year
"Paradigm Shift with Diverse Subscription Services"
Q1 Inventory Assets Total 10.0369 Trillion KRW

LG Electronics' home appliance subscription business achieved its highest quarterly sales in the first quarter of this year.

Seoul Yeouido LG Twin Tower view./Photo by Jinhyung Kang aymsdream@

According to the quarterly report disclosed by LG Electronics on the 16th, the company recorded sales of 345.6 billion KRW in its subscription business in the first quarter of this year. This represents a 72% increase from 201 billion KRW in the first quarter of last year, marking the highest quarterly figure ever.

Since starting its water purifier rental business in 2009, LG Electronics has strengthened its subscription business by expanding product categories and offering management and partnership services. Especially last year, the subscription area expanded beyond home appliances to include refrigerators, washing machines, TVs, and laptops, showing rapid growth. As a result, LG Electronics' subscription business sales increased by 31% in 2023 compared to 2022.

LG Electronics explained, "Customer demand has exploded due to the advantages of lower cost burden compared to purchasing large home appliances and the provision of product management services such as free maintenance during the subscription period." It added, "We are leading the paradigm shift in home appliances through the subscription business that provides desired products and management services tailored to customers' lifestyles."

The VS Business Division, which handles the future growth engine of the automotive electric and electronic equipment business, accounted for 12.6% of LG Electronics' sales in the first quarter of this year, surpassing the previous record of 12.5% in the first half of last year. The sales proportions of other business divisions were 39.3% for Home Appliance & Air Solution (H&A), 16.5% for Home Entertainment (HE), and 7.2% for Business Solutions (BS).

LG Electronics' inventory assets increased from 9.1254 trillion KRW at the end of last year to 10.0369 trillion KRW at the end of the first quarter this year. The ratio of inventory assets to total assets also slightly rose from 15.1% at the end of last year to 16.4% at the end of the first quarter this year.

LG Electronics' research and development (R&D) expenses in the first quarter of this year amounted to 1.0702 trillion KRW, a 13% increase from 945.6 billion KRW in the same quarter last year. During the same period, the proportion of R&D expenses to total sales also rose from 4.6% to 5.1%.

LG Electronics' investment amount in the first quarter of this year was recorded at 579 billion KRW. Investment amounts by business division were 176.9 billion KRW for the VS Business Division, 121.5 billion KRW for the H&A Business Division, 21.2 billion KRW for the HE Business Division, and 8.6 billion KRW for the BS Business Division.