First-quarter sales hit 640 billion won, up 15% year on year; business has grown 30-fold in a decade as LG Electronics expands subscriptions to B2B clients and overseas markets
LG Electronics' home appliance subscription business — one of the company's key growth engines — is expected to surpass 3 trillion won ($2.17 billion) in annual sales this year for the first time.
Rapid growth in business-to-business subscription volume, alongside a steady individual customer base, is fueling the surge. The company's aggressive overseas expansion of the subscription model is also credited as a key driver.
LG Electronics posted 640 billion won in subscription sales in the first quarter of this year, up 15 percent from the same period a year earlier, according to industry sources. If the current growth trajectory holds, the business is expected to cross the 3 trillion won threshold this year, surpassing last year's annual sales of 2.5 trillion won.
LG Electronics' subscription model has been credited with shifting the home appliance paradigm from "ownership" to "experience." Customers pay a fixed monthly fee to use high-end, latest-model appliances without purchasing them outright.
The low upfront cost is a draw, as is the regular in-home maintenance provided by specialists throughout the subscription period. LG Electronics employs roughly 4,000 dedicated "care managers" who make scheduled visits to perform maintenance and provide free repair services.
The subscription business has become a breakthrough for LG Electronics at a time when the broader home appliance market has stagnated, establishing itself as a core revenue stream with strong growth.
Compared with 2016, when subscription sales first crossed the 100 billion won mark at 110 billion won, the business is on track for roughly 30-fold growth in a decade. The compound annual growth rate over the 10-year period stands at 38.8 percent.
Starting this month, LG Electronics has also introduced dedicated subscription services for its ultra-premium built-in appliance brand SKS and its premium brand LG Signature.
The company is extending its subscription reach into the B2B market, a move expected to sustain the strong growth momentum. LG Electronics has partnered with Korea Land and Housing Corp. to supply air conditioners, washing machines and refrigerators on a subscription basis to more than 5,400 units of new public housing set to break ground across the country this year.
Residents will receive regular professional maintenance — including interior and exterior air conditioner cleaning, steam washing of washing machines and refrigerator cooling fan inspections — at no additional cost for six years. The arrangement marks the first time a B2B subscription model has been applied to built-in appliances in apartment housing.
LG Electronics is also broadening its private-sector partnerships, having signed an MOU with GS E&C in February. The company has expanded its B2B-exclusive subscription product lineup to include commercial air conditioners, the "My Cup" tumbler washer and a smart office electronic whiteboard.
The subscription model is also gaining traction abroad. In Thailand, LG Electronics signed up 10,000 cumulative subscribers within nine months of launching the service in 2024, then added another 10,000 in just six more months.
Beyond Thailand, the company is actively growing its subscription business across Southeast Asia — including Malaysia and Taiwan — where high population density and strong demand for maintenance services make the model a natural fit. After launching in Singapore last year, LG Electronics began subscription operations in Vietnam this year and is rapidly expanding into India, the United Kingdom and other markets.
"The 30-fold revenue increase over the past decade reflects not just outward growth but a qualitative transformation in the business model," an industry official said. "With the company now entering the apartment built-in appliance market and stepping up its global push, the subscription business is well positioned to keep growing."
joze@heraldcorp.com
