Lotte Hi-Mart Launches New Brand "PLUX"
First Renewal of HIMADE in Nine Years
Electroland Unveils New Vacuum Cleaner Under "Anak" Brand
Targeting Niche Markets for One- to Two-Person Households with Value-for-Money Products
Lotte Hi-Mart and Electroland, leading players in the home appliance retail industry, have made a bold move by focusing on private brand (PB) products. Amid a sluggish offline consumer market, they are targeting niche markets with value-for-money products aimed at single-person households and similar demographics, while also working to boost brand recognition.
According to industry sources on April 22, Lotte Hi-Mart unveiled its new PB brand 'PLUX' the previous day. This is a revamp of the company's previous PB brand 'HIMADE,' which had been in operation since 2016, marking the first update in nine years. The company explained that 'PLUX' is a portmanteau of the English words 'Plug,' meaning connection, and 'Experience,' and represents the brand's aim to deliver essential value for a smarter everyday life by connecting users to a better daily experience. For this renewal, the company analyzed changing population structures, consumer lifestyles, and consumption trends, and conducted over a year of consulting, consumer research, and product planning.
PLUX has designated one- to two-person households, regardless of age, as its primary customer base. The product lineup includes items tailored for small households, such as the 'PLUX 330L Refrigerator' (449,000 KRW), 'PLUX 43-inch (109cm) Portable QLED TV' (459,000 KRW), and 'PLUX Ultra-Light Station Vacuum Cleaner' (249,000 KRW). Before launching PLUX, Lotte Hi-Mart tested the marketability and potential for success of certain products, then proceeded to develop follow-up items. The 'Single-One Refrigerator,' released in May last year with a capacity of 245L, sold out its initial batch of 3,000 units within two weeks of launch and surpassed 10,000 units sold within just over 50 days. Similarly, the 'Single-One Vacuum Cleaner,' launched in August last year, sold out its initial batch of 2,000 units within about a month. These products currently rank number one in sales within their respective categories.
A Lotte Hi-Mart representative stated, "While there is strong demand for major home appliance brands such as Samsung and LG, there are also many consumers seeking practical and reasonably priced small appliances. By reflecting the needs of these customers, we aim to expand options with PB products optimized in performance and specifications for one- to two-person households, and to target small-scale niche markets."
This strategy takes into account the rapidly changing population structure. According to Statistics Korea, the proportion of one- to two-person households, which stood at 62.7% in 2022, is projected to steadily increase to 71.2% in 2032, 74.8% in 2042, and 76.8% in 2052.
After-sales service for PB products is also being strengthened. The warranty period for after-sales service on small and medium-sized appliances under the PLUX brand has been extended by up to two years compared to conventional appliances, now offering a three-year warranty, while large appliances are covered for up to five years. Lotte Hi-Mart plans to launch new PB products across various categories, including kitchen, living, seasonal, and IT, and aims to operate over 200 PLUX products within this year.
Electroland has also recently introduced the 'Anak Slim Dust Station,' a vacuum cleaner priced under 300,000 KRW, through its PB brand 'Anak,' which was launched in 2008. This is Electroland's first station-type vacuum cleaner. The product's weight and size have been reduced to target newlyweds and one- to two-person households. With a retail price of 299,000 KRW, it is sold at about half the price of major manufacturers' automatic dust bin emptying vacuum cleaners.
Electroland currently operates a variety of PB small appliances, including circulators and humidifiers. The company explained, "By expanding our PB product lineup, we are focusing on broadening consumer choices so that customers can purchase not only premium products from leading manufacturers but also value-for-money items."
Such initiatives are seen as strategies by the home appliance retail sector, which has suffered years of poor performance, to find a breakthrough. Lotte Hi-Mart's annual sales, which were around 4 trillion KRW in 2020, dropped to 2.3567 trillion KRW last year, while operating profit fell from 160 billion KRW to 1.7 billion KRW over the same period. S.Y.S. Retail, which operates Electroland, also saw its annual sales decrease from 850.4 billion KRW in 2020 to 522 billion KRW last year, and its operating profit, which was 6.6 billion KRW, turned into a deficit of negative 1.8 billion KRW the following year, with the operating loss widening to 17.2 billion KRW last year.
An industry insider commented, "Strengthening PB brands is not only a strategy to improve profitability but also an effort to attract consumers to offline stores. The home appliance retail sector, which has faced difficulties for several years, is attempting to differentiate itself through various initiatives."
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