Samsung Electronics adds the first water purifier to the popular Bespoke… Is there a signal to enter the 40兆 rental market?

Input 2021.03.19 16:59 | Revision 2021.03.19 17:04

Samsung Electronics launches its first water purifier at the end of this month
Possibility to enter the rental market with the start of water purifier
LG rental sales 5 times in 10 years
Samsung “Reviewing collaboration with rental companies”

Samsung Electronics is adding a water purifier to the recently popular customized household appliances’Bespoke’. This is the first time to launch a water purifier featuring the Samsung Electronics brand. Considering that 80% of the domestic water purifier market is rental, the industry is predicting that Samsung Electronics will start in earnest into the rental (rental) market worth 40 trillion won starting with water purifiers.

According to the electronics industry on the 19th, Samsung Electronics is planning to launch a Bespoke water purifier at the end of this month. The Bespoke water purifier is manufactured as a direct water type of’under sink type’ that is installed under the kitchen sink. ‘Purified water’ can be used alone, or by combining modules, various combinations such as’purified water + cold water’,’purified water + hot water’, and’purified water + cold and hot water’ are possible. The individuality of the Bespoke product line, which is tailored to individual tastes, is utilized to the maximum. The color of the water purifier to choose from is also varied in six colors, including black, white, gold, and silver. It is known that the factory price is up to 1.3 million won.

The Bespoke water purifier is significant in that Samsung Electronics is entering this market for the first time. Until 2004, Samsung Electronics brought and sold the finished water purifier product of its subsidiary Nobita, but this is the first time to attach the’Samsung’ brand.

The industry expects to enter the rental market directly after Samsung Electronics released the Bespoke water purifier. This is because rentals dominate the domestic water purifier market. LG Electronics, a consumer electronics rival, also rents 90% of the water purifiers currently on sale, while Coway and Cheongho Nice sell 90% and 80%, respectively.

Rental sales are a sales method in which products are rented through a contract for a certain period of time. At the end of the contract term, ownership of the product is often transferred to the consumer. It is considered a kind of installment concept. The rental cost includes a maintenance service, so it is somewhat expensive compared to the general selling price, but it is highly preferred by the consumer because it manages pipe cleaning or filter replacement, which is difficult for consumers to do. In addition to water purifiers, the rental market is formed mainly by hygienic appliances such as air purifiers, clothes managers, and bidets.

According to the KT Research Institute of Management and Economics, the size of the domestic rental market has grown by 14% on an annual average since 2016, reaching 40 trillion won last year. In particular, with the prolonged coronavirus infection, interest in sanitary appliances is expected to increase the size of this market. The KT Research Institute of Management and Economics predicted that “as the rental demand continues, (the rental market) will maintain double-digit growth in the future.”

Samsung Electronics is also considering entering the rental market. Hwang Tae-hwan, executive director of Samsung Electronics Korea’s CE (household appliance) sales team, recently said, “In the case of Bespoke water purifiers, we plan to proceed with general sales first,” and “We are also considering rental sales through collaboration with many companies.”

This movement of Samsung Electronics also seems to have had an effect on the fact that LG Electronics is making clear results in the rental market. The sales of the LG Electronics rental business increased more than five times in 10 years from 99.9 billion won in 2015 to 590.1 billion won last year.

An official in the electronics industry said, “Unlike direct purchase products, rental home appliances have a strong perception that they are hygienic and safe because they can be continuously managed.” Because of this, there is a high possibility that Samsung Electronics will also enter the rental business.”