[Exclusive] "Use Samsung Air Conditioner Cleaning Service for 150,000 KRW per Month"... Entering the Home Appliance Subscription Market

Samsung Electronics' Home Appliance Subscription Business Outline... "Announcement Around September-October"
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Samsung Electronics is entering the home appliance subscription business. Until now, it was widely believed that Samsung Electronics' entry into the home appliance subscription market was only a matter of time, and now the specific outline of the business is beginning to emerge. The home appliance subscription market has been rapidly growing recently since LG Electronics made a full-scale entry in 2022. Competition among home appliance companies is expected to intensify.

A Samsung Electronics Service engineer inspecting an air conditioner.
Photo by Samsung Electronics

Samsung Electronics to Launch Subscription Service in September-October

According to the home appliance industry on the 12th, Samsung Electronics will introduce an artificial intelligence (AI) home appliance subscription service around September to October. An industry insider familiar with Samsung Electronics' home appliance business said, "It is true that Samsung Electronics is preparing for the subscription business," adding, "I understand that the service will start by October at the latest."

Samsung Electronics is undertaking various tasks to launch the service. While preparing various additional services to enhance consumer benefits, it plans to collaborate with credit card companies to introduce partnership cards. Regarding this, a credit card industry official said, "Several credit card companies are participating in this partnership by offering benefits on subscription fees."

Samsung Electronics All-in-One Washer Dryer 'Bespoke AI Combo' / Photo by Samsung Electronics

Home appliance subscriptions differ from the traditional installment purchase method. Although consumers pay a fixed monthly fee after setting a subscription period to use the product, they also receive services such as product management and repairs. Since it can be burdensome to pay the full price at once for high-priced large appliances or premium products, the subscription model can be advantageous for consumers. For example, if a 4 million KRW air conditioner is used through a subscription service with a 3-year contract period, the consumer pays 150,000 KRW per month and can also receive services like air conditioner cleaning.

Samsung Electronics decided to enter the home appliance subscription market because of its recent remarkable growth. In particular, LG Electronics' rapid success after entering the market seems to have influenced this decision. LG Electronics' subscription-related sales have exceeded 1 trillion KRW, becoming a unicorn business. There are even specific forecasts that this year's annual subscription sales could surpass last year's record high sales of 1.1341 trillion KRW. Last month, 36.2% of consumers purchasing LG Electronics' premium home appliances chose subscription models.

Samsung Electronics plans to launch subscription services centered on AI home appliances. Declaring this year as the 'Year of AI,' it is releasing various home appliances equipped with AI functions. Refrigerators, washers and dryers, and air conditioners are expected to be the subscription target products.

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Samsung Electronics has previously offered home appliance rental services through partnerships with external companies but has never directly entered the subscription business. It has only introduced ‘Samsung Care Plus,’ which provides various management services to its home appliance purchasers.

Samsung Electronics 'Bespoke AI Family Hub' New Product / Photo by Samsung Electronics

The market expects that the launch of Samsung Electronics' service will make competition in the home appliance industry more intense in the second half of the year. Its competitor, LG Electronics, is increasing its revenue streams in the home appliance subscription market and positioning subscription as a core keyword in its home appliance business. As a result of expanding the subscription business from small appliances to large appliances in 2022, it has achieved success.

If Samsung Electronics joins the home appliance subscription market, the market structure is likely to shift to a two-giant system. This will likely intensify competition, which could lead to enhanced consumer benefits. Professor Lee Young-ae of the Department of Consumer Studies at Incheon National University explained, "When additional competitors enter the market, consumers can enjoy more benefits such as price reductions and diversified services. When there is no real competitor, one company inevitably holds the decision-making power over prices and services."

Samsung Electronics officially stated that there is "no decision made" regarding its entry into the home appliance subscription market.