LG HelloVision’s home appliance rental business called LG Hello Rental is being established as a new growth engine for the company as LG HelloVision has been making a growth around 70% every year due to its rental business.
In addition to traditional rental products such as water purifier and bidet, the company also targets niche markets such as food waste disposal unit and running machine in order to separate itself from other rental businesses. The company is also expected to create synergy with affiliated companies such as LG Uplus and LG Electronics.
According to LG HelloVision on Tuesday, the company’s average annual revenue from its rental service has been making a growth around 70% every year since it launched the “Hello Rental” brand in September of 2016.
In the beginning, the company’s rental service was centered around TVs and PCs. Its rental service started to pick up momentum in 2018 and it led to the company launching an official online rental shop. Since then, the company has also diversified options from its rental service that now includes products related to environment and home appliances.
After HelloVision was acquired by LG Uplus at the end of 2019, LG HelloVision started to create synergy with affiliated companies of LG Group and it has expanded its rental business towards home appliances related to health and current trends.
LG Hello Rental breaks away from traditional home appliances and focuses on niche home appliances that are currently trending. It currently provides a variety of popular home appliances from 49 small and medium-sized and mid-sized brands. Health-related equipment such as running machines are currently sold the most by the rental business. Massage chairs and waste disposal units are also very popular by consumers.
“The rental market is elevating its entry barrier by focusing on after-service and integrating cutting-edge technologies.” said Kim Yeon-bae who is responsible for LG HelloVision’s rental business. “We believed that there was an opportunity to grow in niche products that are not rented out by the current rental companies.”
Cable TV, internet, and MVNO (Mobile Virtual Network Operator) services are major sources of LG HelloVision’s revenue. Because the company has been providing its home visit service for consumers for a long time, it was easy for the company to expand its business towards rental business. About 30% of consumers who use LG Hello Rental are cable TV customers of LG HelloVision.
LG HelloVision made about $62.3 million (70 billion KRW) in sales last year through LG Hello Rental and it is looking to make $89 million (100 billion KRW) in sales this year. Considering the fact that LG HelloVision’s annual revenue is around $934 million (1.05 trillion KRW), the amount is still relatively low. However, LG Hello Rental is the one that is seeing sales grow at the fastest rate out of LG HelloVision’s new businesses.
LG HelloVision also looks to provide its own OEM (Original Equipment Manufacturer) products through LG Hello Rental. The company released a food waste disposal unit called “HelloVision Green Sink” on Tuesday. The company plans to improve the image of its rental business by expanding lineup of home appliances with its brand and secure loyal customers.
The company also looks to create synergy with affiliated companies of LG Group. There is a chance that the company will introduce a variety of products with LG Electronics and others.
“By creating synergy with broadcasting communications, LG HelloVision will develop into a “life media” business that provides all lifestyle services that consumers enjoy at home as an one-stop service.” said Kim. “We plan to push for systematic combination between our services based on 4 million customers of our cable TV service and prepare a different growth model for our cable business.”
Staff Reporter Park, Sora | srpark@etnews.com