Transfer of 3 Kitchen Appliances to Kyungdong Navien
Entry into AI-Based Pet Care, Silver Care, and Healthcare Businesses
SK Magic has restructured its business by exiting low-profit divisions such as kitchen appliances. Moving forward, the company plans to focus on future growth strategies utilizing artificial intelligence (AI).
On the 6th, SK Magic announced that it will transfer the business rights for three product categories?gas ranges, electric ranges, and electric ovens?to Kyungdong Navien on the 30th. The transfer price is 37 billion KRW.
SK Magic has been continuously restructuring its business this year. In March, it divested its dishwasher business, followed by the food waste disposer business in April. The primary reason for these changes is to improve growth potential and operational efficiency. The remaining business segments are water purifiers, air purifiers, bidets, and mattresses.
The business restructuring has led to improved profitability. According to the electronic disclosure system, SK Magic's consolidated sales for the first half of this year were 413 billion KRW, a 7.3% decrease compared to the same period last year, but operating profit increased by 9.2% to 47.7 billion KRW.
The key to SK Magic's new business growth is AI. The company plans to transform itself into an AI wellness platform enterprise. Considering that South Korea will enter a super-aged society next year with over 20% of the population aged 65 or older, that more than 80% of the elderly population suffer from chronic diseases, and that last year the number of pet-owning households reached 5.6 million, exceeding 20% of all households, the company sees opportunities to capture the market.
The new product categories will be divided into core products such as water purifiers and air purifiers equipped with AI technology, as well as pet care, silver care, and healthcare. SK Magic anticipates that the global smart wellness market will grow from $72 billion (approximately 96 trillion KRW) in 2022 to $520 billion (694 trillion KRW) by 2030. To support R&D for new AI-applied products, the company established an AI Growth Office through a departmental reorganization earlier this year.
Based on this, SK Magic plans to enter the smart wellness markets in the United States, Southeast Asia, and other regions next year. Production of related products is being considered both domestically and overseas. To achieve this, the company will leverage the global network of its parent company, SK Networks. A SK Magic representative stated, "Through AI-based business restructuring, we plan to increase domestic and international rental subscribers from 2.4 million accounts last year to 3.1 million accounts by 2028, and raise the average revenue per user (ARPU) from 24,000 KRW to 49,000 KRW during the same period."
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