Korea: South Korea's home appliances face the threat of being overtaken by China

¬ High-end market reaches its peak, cost-performance is not as good as Chinese companies... Finding breakthroughs through home appliance subscriptions and software

Although Samsung Electronics achieved its highest performance in history, one department was not smiling—its home appliances and television division. Thanks to the chip boom, in the fourth quarter of 2025, Samsung Electronics recorded the highest quarterly operating profit in the history of Korean companies, but the television and home appliances division suffered an operating loss of 60 billion KRW (approximately RMB 2.8 billion). From a profit of 20 billion KRW (approximately RMB 930 million) in the fourth quarter of 2024 to a loss. In the fourth quarter of 2025, LG Electronics' MS division (responsible for TVs) and HS division (responsible for home appliances) also suffered an operating loss of 432.6 billion KRW (approximately RMB 2 billion).

Korean home appliances and television are facing a crisis. In the early 2000s, South Korea pushed Japan out of the global market and dominated the market. Faced with China's low-price attack, it has always relied on technological strength to develop high-end product lines, making China unable to catch up. However, the technical gap between China and South Korea is narrowing year by year. Consumers' purchasing trends have changed, and the replacement cycle has lengthened, along with factors such as economic slowdowns. The high-end home appliance market, which was expensive, has reached its ceiling. South Korean home appliances have lost their differentiation in the expensive high-end market and lack cost-effectiveness in the mid-to-low price market, facing a dilemma from both sides. In this situation, Korean TV and home appliance companies are trying to find new breakthroughs through subscription services and differentiated software technology.

Shrinking high-end market

Entering the 2000s, Chinese companies such as Xiaomi, TCL, and Hisense launched low-priced products imitating South Korean home appliances and televisions. Samsung Electronics and LG Electronics shifted to the high-end market. At first, this strategy was effective. However, with prolonged economic stagnation, the high-end market has stalled. An official at a home appliance retail store said, "When housing prices rise and the economy is poor, the first thing people cut back on is home appliance purchases," "Consumers more often choose practical products without additional features."

The situation in the TV market is particularly severe. According to market research company Omdia, in the global TV market (based on sales), the market share of high-end TVs priced above 1,500 USD dropped from 22.4% in 2021 to 13.8% in 2025. During the same period, the market share of low-priced TVs priced below 500 USD increased from 31.5% to 39.7%.

At the same time, the presence of China has continued to expand in the mid-to-low price market. In 2024, China's Haier had a sales revenue of 285.9 billion yuan (approximately 5.8 trillion KRW), becoming the world's largest home appliance group. Meanwhile, small and medium-sized Chinese home appliance companies such as Roborock and Ecovacs have captured the global market, including South Korea, with their robot vacuum cleaners.

Home appliance subscriptions, expanding overseas

Korean home appliance industry is seeking breakthroughs through subscription services. Subscription service for home appliances allows consumers to pay monthly fees to use washing machines, refrigerators, vacuum cleaners, etc., and obtain consumables and services. After the subscription period ends, they can own the product. Low initial costs can achieve mass customer acquisition, and regular services can bind users, achieving a "lock-in" effect.

LG Electronics has been offering home appliance subscription services in Southeast Asian countries such as Thailand, Malaysia, and Singapore. In October 2024, LG Electronics started providing subscription services in Thailand, with user numbers exceeding 30,000. In 2024, LG Electronics' subscription sales revenue reached 1.92 trillion KRW (approximately RMB 9 billion), increasing to 2.48 trillion KRW (approximately RMB 11.6 billion) in 2025. Samsung Electronics is also considering entering overseas markets. Currently, Samsung Electronics' subscription offerings cover 21 categories and over 650 products in South Korea. In September 2025, it launched the "Blue Pass" program, which provides priority after-sales service for subscription home appliances.

TV businesses are also enhancing advertising and other additional revenues through self-developed OS (operating systems). Samsung Electronics is expanding its free ad-supported streaming TV (FAST) services on TV platforms. Recently, the global monthly active users (MAU) of "Samsung TV Plus" exceeded 100 million. LG Electronics' self-developed software Web OS is also providing services to 260 million devices in 190 countries around the world.

Source: Chosun Ilbo

Original article: toutiao.com/article/1858918712335690/

Disclaimer: This article represents the views of the author himself.