December 22, 2024

• 

Visitors explore AI subscription club service by visiting Samsung Electronics' offline store in southern Seoul. (Samsung Electronics)

Samsung Electronics has entered a new round of competition with LG Electronics in the home appliance subscription services market by launching its own service centered on artificial intelligence products.

Samsung announced Sunday the introduction of its AI subscription club service, which is available at the tech giant’s offline store nationwide and official online store.

This service allows consumers to pay a monthly subscription fee to use home appliances for a certain period. By subscribing, consumers can reduce the initial cost of purchasing products and enjoy the latest home appliance models at affordable prices.

Samsung’s subscription service model covers products from TVs and refrigerators to washing machines and vacuum cleaners, with over 90 percent of the offerings featuring AI-powered products.

"We will expand subscription products so that many consumers can experience AI Life," said Kim Yong-hoon, corporate vice president of Korea sales and marketing at Samsung Electronics. "We'll realize the vision of AI for All in all areas."

Customers can select the products and services they need through various subscription plans. The all-in-one plan includes products, free repairs and optional care services.

The AI subscription club leverages the AI features of Samsung’s smart home platform SmartThings to provide care services. It offers a monthly care report for subscribers, which includes device diagnostics, usage patterns and energy consumption data.

Industry sources said Samsung’s entry into the subscription business aims to find a breakthrough in its consumer electronics division, which has experienced stagnant growth. This year, the performance of the tech giant’s home appliance sector has been sluggish.

The combined operating profit of Samsung's video display and home appliance divisions came to 380 billion won ($272.3 million) in the first three quarters, while LG's TV and home appliance divisions recorded 615.2 billion won.

As the home appliance industry faces prolonged demand stagnation, the subscription model, aligned with the growing subscription economy trend, has emerged as a potential breakthrough to overcome the economic downturn.

KT Economic Management Research Institute forecasts that the domestic subscription economy market, including home appliances, will grow from 40.1 trillion won in 2020 to 100 trillion won by next year.

Samsung's rival LG has been actively fostering the home appliance subscription business. Since 2009, when LG started its water purifier rental service, the company has expanded its product range and services to strengthen its subscription business.

In 2022, LG officially entered the home appliance subscription market, leading to rapid growth in the sector. In June, 36.2 percent of consumers purchasing LG's premium home appliances chose subscription models, highlighting the increasing popularity of this business approach.

As of the third quarter, LG’s home appliance subscription revenue has exceeded 1 trillion won for the first time, showing rapid growth. The company also launched a service in Malaysia in March, allowing customers to subscribe to products such as water purifiers, washing machines and dryers.

By Jie Ye-eun (yeeun@heraldcorp.com)