Korea’s home appliance makers increasingly use platform business model

Samsung Electronics Co.‘s Bespoke Qooker [Photo provided by Samsung Electronics]

South Korean electronics companies are taking advantage of a platform strategy to boost product sales in a response to the already saturated domestic market, as well as to the long replacement cycles for electronic devices.

The strategy seems to be working as it effectively locks consumers in and encourages them to continue purchasing related products and services.

According to sources on Monday, Samsung Electronics Co. has applied the platform concept to the sales strategy of its Bespoke Qooker unlike other home appliance products. Bespoke Qooker is a multi-cooker with various functions such as a microwave, grill, air fryer and toaster.

The cumulative sales of Bespoke Qooker, which was released in July 2021, reached 170,000 units as of last month, up by 70 percent from 100,000 units at the end of May last year.

Samsung Card launched a subscription service called ‘My Qooker Plan’ in collaboration with food companies. This service allows customers to purchase meal kits and home meal replacement products that can be cooked with Bespoke Qooker, which is available at a discount if they sign up for a contract period. This has the effect of locking in consumers like a platform company.

Samsung’s e-Food Store, where meal kits and other products can be purchased, is growing rapidly. In January last year, Samsung Electronics launched e-Food Store that sells a variety of food products in conjunction with home appliances. In just one year since the launch, the number of partner companies rose to 42 from 15 and subscribers surged by over 70 percent on-year in March.

LG Electronics Inc.’s home plant growing machine “tiiun” and craft beer brewing machine “Homebrew” are also linked to the platform strategy of household electronics. Consumers who purchase tiiun must purchase customized seed kits developed directly by LG Electronics. Since it takes one to two months to grow plants, they must purchase seed kits at least once every two months.

According to the company, sales of seed kit packages as of last month have nearly tripled compared with October 2021, when the product was launched. LG Electronics continues to introduce new varieties of seeds to pique consumer curiosity.

For homebrewing, consumers must purchase beer capsules to make beer on a regular basis. For example, if a consumer buys beer capsules twice a month for a year, LG Electronics can make the same profit as selling one machine. However, the two devices are more of a hobbyist appliance than an essential home appliance, meaning it is not yet profitable.