Considering Subscription Business After Observing LG and Samsung
European Home Appliance Market Estimated at $101.6 Billion
Attention on Establishing as a 'Global Trend'
Lintner, IFA CEO: "European Companies Like Liebherr Show Great Interest"
European home appliance companies are closely monitoring the subscription business trends of LG Electronics and Samsung Electronics and are considering introducing similar models themselves. As of last year, the European home appliance market was estimated to be worth $101.6 billion (approximately 140 trillion won), making it a massive market. There is growing attention on whether the home appliance subscription business, which has gained popularity in Korea, will establish itself as a global trend under the name "K-appliance subscription."
Life Lintner, CEO of the Berlin International Consumer Electronics Fair (IFA), recently met with Asia Economy after a press conference held at COEX in Samseong-dong, Seoul. He stated, "European companies, including Liebherr, a premium refrigerator manufacturer, are paying close attention to Korea's home appliance subscription business." Liebherr is a luxury home appliance company that produces about 2.2 million refrigerators and freezers annually and boasts the top market share for refrigerators in Germany. He added, "I also believe that the home appliance subscription business is a model that can work not only in Korea but also in the global market," and continued, "In Korea, despite a sluggish home appliance market, the subscription business is creating new demand and revitalizing the consumer market."
The home appliance subscription model is a service where consumers pay a monthly subscription fee for a certain period to use home appliances. Compared to the traditional method of purchasing appliances outright, this model reduces the initial financial burden and allows consumers to replace or upgrade products as needed, which has led to a high level of consumer response. LG Electronics reorganized its existing rental business to launch this service, and Samsung Electronics entered the business last year.
According to CEO Lintner and industry sources, European companies are particularly attracted to the fact that the home appliance subscription business of Korean companies can help minimize risks associated with new product launches. For new home appliances, consumer interest and response at the initial launch stage are extremely important. If a product fails to attract attention, it quickly disappears from the market. The subscription business alleviates this burden for home appliance companies and provides consumers with opportunities to experience new products without significant financial pressure. CEO Lintner said, "If a product does not sell well, connecting it to a subscription service can give consumers time to become familiar with the product, which can be effectively utilized as a marketing strategy."
Having achieved significant profits from the home appliance subscription business in Korea, LG Electronics has turned its attention to overseas markets starting this year. The company is expanding its subscription business to countries such as India, which has a population of 1.4 billion, as well as Thailand, Malaysia, Taiwan, and Hong Kong. LG Electronics plans to grow its home appliance subscription revenue to approximately 6 trillion won by 2030. Samsung Electronics is also reportedly considering expanding its presence in overseas markets, with Germany and other European markets within its scope.
CEO Lintner commented, "Germans tend to strongly prefer clear ownership of products, but recently, demand for subscriptions has been increasing, especially among the younger generation." He added, "Some German companies, such as Clover and other distributors, are operating businesses where purchase costs are divided and paid over time. There is a possibility that the home appliance subscription market will gradually open up, driven by Korean companies."
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