Home appliance and household goods makers in South Korea are moving beyond their core products into new categories such as beauty devices and refrigerators. The strategy is aimed at reducing reliance on their main markets and capturing niche demand as consumer needs become more segmented.
Shinil Electronics (002700.KS) plans to launch a beauty device in the second half of this year to expand its home appliance lineup, according to industry sources on the 18th. The company had already moved into the beauty appliance market with products such as hair dryers.
The move is seen as an effort to diversify a revenue structure centered on seasonal appliances. Summer products including electric fans and portable air conditioners accounted for 73.7% of Shinil Electronics' revenue in the first half of this year, according to filings on the Financial Supervisory Service's electronic disclosure system. "We plan to reduce our reliance on seasonal appliances and secure product lines with stable year-round demand," a Shinil Electronics official said. "We will expand development and launches of related products after reviewing market response and consumer demand."
Cuchen, which grew on the strength of rice cookers, is also broadening its lineup across household appliances. The company entered the refrigerator market in August with four models, then introduced its first steam humidifier in September. The strategy is to extend from kitchen appliances into household appliances while using smaller products to target segmented demand from single-person households and other niche segments.
Lock&Lock offers an example of success in niche appliances. Jennifer Room, the company's small appliance brand, is growing revenue with product categories that established appliance makers had not prioritized. The initial shipment of the Pro model of its signature standing hair dryer, launched in the first half of this year, sold out within two months.
Driven by small appliances including coffee machines and standing hair dryers, Jennifer Room's cumulative revenue for January through August rose 48.7% from a year earlier. The brand also posted gains abroad, with revenue in Thailand up 80% last year from the previous year and Vietnam up more than 600%. Lock&Lock has also been expanding from household goods into appliances, adding a 50-liter kimchi refrigerator last year.
The push by mid-sized and smaller appliance makers to diversify their lineups and secure new revenue beyond their core markets is expected to spread further. As they broaden their businesses to meet segmented demand tied to the rise in single-person households and to beauty and convenience needs, the boundaries between kitchen appliances, household appliances and beauty appliances are gradually blurring.
"The appliance market has reached maturity, so companies will have no choice but to expand their boundaries," said Lee Young-ae, a professor of consumer science at Incheon National University. "This trend will become more pronounced going forward, and it is time for companies to work out differentiated strategies."