Ryu Jae-cheol, President of LG Electronics, "Aiming for Top 3 in US B2B Home Appliances by 2026"

'KBIS 2024' Press Conference
Leveraging B2C Success to Expand B2B Market
Establishment of Dedicated Sales Team

"With premium home appliances leading the way, we will leap into the 'Top 3' in the U.S. business-to-business (B2B) home appliance market by 2026."

On the 27th (local time), Ryu Jae-cheol, President of LG Electronics H&A Business Division, stated at a press conference held at the Fontainebleau Hotel in Las Vegas during 'KBIS 2024', "Based on differentiated product competitiveness, (LG Electronics) aims to become the 3rd largest company within three years in the (U.S. B2B home appliance) market, which is growing rapidly at over 20% annually."

The current U.S. home appliance market is the largest in the world, valued at $40 billion (approximately 53 trillion KRW). Among this, the B2B market is estimated to be 20%, or $7 billion (approximately 9.35 trillion KRW). LG Electronics plans to focus on this market and leap from its current top 5 position in the B2B industry to 3rd place within three years, following General Electric (GE) and Whirlpool. At this KBIS, LG Electronics introduced an appliance package targeting builders, considering that most built-in appliances are supplied to construction sites through builders.

Ryu Jae-cheol, President of LG Electronics H&A Business Division

President Ryu explained, "The business-to-consumer (B2C) market is an open market with fierce competition, but once relationships are established with customers in the B2B market, a strong 'lock-in effect' occurs," adding, "Customers rarely change, which allows for stable business maintenance." Although the B2B market has high initial entry barriers, it is less affected by economic fluctuations, so once the business is on track, stable sales and profits can be expected.

Accordingly, LG Electronics views B2B as the key to expanding its presence in the North American home appliance market and is strengthening its efforts to target this market. Premium home appliances are broadly divided into three categories: 'Luxury,' 'Premium,' and 'Mass.' LG Electronics plans to expand the foundation of its B2B business through a mass premium strategy.

As a strategy to target the U.S. B2B market, differentiated product competitiveness was highlighted.

President Ryu said, "Differentiated products are essential to change the market," and added, "LG Electronics has competed in the market with the 'Signature Kitchen Suite,' launched in 2016, and having been recognized by customers, it is now time to expand the business across the entire B2B sector." He further stated, "Products incorporating B2C technology can maintain competitiveness in the B2B market as well."

Based on the confidence built over the past eight years in the U.S. market since the launch of the premium built-in Signature Kitchen Suite brand and a long preparation period, LG Electronics is determined to make this year the inaugural year for targeting the B2B market. The fact that the head of LG Electronics H&A Business Division held a press conference at KBIS, the largest annual bathroom and kitchen exhibition in North America, after eight years reflects this determination.

LG Electronics has also significantly expanded its B2B sales organization and logistics infrastructure. It established a dedicated organization for builders called 'LG Pro Builder' and supplies LG Electronics' appliance portfolio in a customized manner. The B2B sales workforce has been expanded to about 100 people.

LG Electronics believes that conditions for targeting the B2B market have been created as the U.S. housing market gradually recovers. Although the 30-year fixed mortgage rate is relatively high at around 7%, new housing supply in the U.S. is expected to recover to average levels, increasing slightly from 1.4 million units last year to 1.49 million units this year. LG Electronics forecasts that the housing market size will be maintained in the first half of the year and grow in the second half.

President Ryu reiterated, "We will target the U.S. B2B market by advancing our product portfolio with innovative home appliance technologies and services."

He also shared his views on risks such as tariff increases if former President Donald Trump, who is running in the upcoming U.S. presidential election in November, is elected. Previously, in February 2018, Trump implemented a 'safeguard' measure imposing tariffs on imported washing machines to protect domestic companies like Whirlpool.

President Ryu said, "We paid the tuition fee at that time, and now we have prepared countermeasures for the possibility of new tariff issues," adding, "We have a flexible production system in place that allows risk hedging regardless of where in the world any issues arise."

This content was produced with the assistance of AI translation services.