Interior view of the Miele Experience Center Cheongdam (Image courtesy of Miele Korea)
SEOUL, Apr. 12 (Korea Bizwire) — Miele Korea, the South Korean subsidiary of the German premium home appliance brand, is struggling to maintain its footing, with operating profits plunging a staggering 83% last year compared to 2021.
In a bid to douse the flames, the company has recruited Choi Moonsup, the former head of Mulberry Korea, as its new chief executive, tasking the non-appliance industry veteran with the formidable challenge of reviving Miele’s fortunes in the competitive Korean market.
According to filings with the Financial Supervisory Service, Miele Korea’s operating profit for 2023 tumbled to a mere 256 million won, an 82.9% nosedive from the 1.5 billion won recorded in 2021.
Miele Korea had enjoyed a remarkable surge in operating profits during the COVID-19 pandemic, tripling from 840 million won in 2020 to 3.3 billion won in 2021 as premium home appliances gained widespread appeal among consumers.
This contrasted starkly with the struggles faced by other premium appliance brands, such as Whirlpool, which have failed to gain significant traction in the South Korean market.
Miele Experience Center Songdo (Image courtesy of Miele Korea)
Miele has traditionally banked on its superior engineering, guaranteeing durability for up to 20 years, combined with a luxury brand positioning. Its kitchen appliances, including dishwashers, washing machines, and refrigerators, became must-have items for wealthy households in Seoul’s affluent Gangnam district.
However, as the post-pandemic revenge spending frenzy subsided and domestic giants like Samsung Electronics and LG Electronics intensified their premium appliance offensives, Miele has found itself increasingly outmaneuvered.
“The domestic market has long been a graveyard for foreign appliance brands, and now Samsung and LG are pouring massive advertising and marketing budgets into their premium appliance lineups,” commented an industry insider. “Miele’s products are also priced higher than domestic offerings, making it challenging to withstand such an onslaught.”
Recognizing the gravity of the situation, Miele Korea has turned to a proven executive to lead its turnaround efforts. Choi is a seasoned retail industry veteran with over 26 years of experience under his belt.
Industry observers anticipate that Choi’s appointment will pave the way for a comprehensive overhaul of Miele Korea’s operations, tailoring its business model to the premium appliance market, the company’s core battleground.
“I will raise awareness of Miele’s globally acclaimed premium appliance quality and value in Korea while expanding customer touchpoints to ensure consumers can truly experience our innovative technologies,” Choi stated, expressing his ambition to establish Miele as a leader in the luxury appliance segment.
Miele Korea has already taken steps to bolster its premium market offensive, recently venturing into the clothes dryer market, which has been virtually monopolized by LG Electronics’ patented products.
The company has also introduced a premium coffee machine care service, offering customers a thorough reconditioning experience for their existing Miele coffee makers, aiming to boost customer satisfaction.
M. H. Lee (mhlee@koreabizwire.com)
