LG Puricare Objet Collection Water Purifier Light-On with subscription service from LG Electronics (Image provided by LG Elecs)
SEOUL, July 25 (Korea Bizwire) – South Korean tech giant LG Electronics is making significant strides in its subscription-based appliance business and B2B sector, signaling a shift in its long-term strategy.
In a conference call on July 25 to discuss second-quarter results, company executives outlined the progress and future plans for these key growth areas.
Kim Yi-kwon, who heads the H&A division at LG Electronics, revealed that subscription services now account for over 20% of the company’s large appliance sales in South Korea.
This segment, which includes refrigerators, washing machines, and other major household appliances, is maintaining double-digit operating profit margins.
“We expect subscription service revenue to continue expanding,” Kim stated. He added that LG is leveraging its experience in the Korean market to expand the model internationally, with recent launches in Malaysia, Taiwan, and Thailand.
Plans are underway to enter the Indian market by year-end, with the company also exploring opportunities in the U.S. and Europe.
LG Electronics’ in-car webOS content platform applied to the Kia EV3 (Image provided by LG Elecs)
Another area of focus is LG’s webOS platform, the operating system powering its smart TVs and an increasingly important part of its connected device strategy.
Lee Jung-hee, the director of the HE division, reported that webOS revenue has already exceeded targets for the first half of the year, keeping the company on track to reach its 1 trillion won annual revenue goal.
In the automotive sector, LG’s Vehicle Component Solutions (VS) division aims to maintain its order backlog of over 100 trillion won by year-end, despite short-term slowdowns in electric vehicle demand.
Kim Joo-yong, director of the VS division, expressed confidence in achieving high single-digit percentage growth compared to the previous year, driven by steady growth in infotainment systems and expansion into high-value automotive components.
LG’s B2B sector, which includes vehicle components and HVAC systems, is also showing strong performance. Park Won-jae, who heads Investor Relations, noted that B2B sales have already reached 35% of total revenue in the first half of 2023, well on the way to meeting the company’s 2030 target of 40%.
Regarding speculation about a potential IPO for LG’s Indian subsidiary, Park stated that while various strategies for growth and increasing corporate value are under consideration, no decisions have been finalized.
Kevin Lee (kevinlee@koreabizwire.com)
