Electroland's 'Winning Move'... Expanding Paid Membership Stores by 30 More

Electroland is reportedly planning to expand its paid membership store 'LAND 500,' the first of its kind in the domestic home appliance retail industry, by about 30 more locations this year. As the total sales of LAND 500 stores increased in its first year of introduction last year, this is interpreted as a blueprint to continue using it as a driving force to escape poor performance.

According to industry sources on the 5th, Electroland plans to convert about half of its nationwide stores into LAND 500 within this year. As of this date, Electroland has 109 stores nationwide, of which 22 are paid membership stores, including the 'LAND 500 Balan Branch' that opened last month in Hwaseong, Gyeonggi Province. Electroland is reportedly planning to sequentially renew and open 2 to 3 stores as LAND 500 each month.

Exterior view of 'Land500 Naedong Branch,' an E-Land paid membership store. [Photo by E-Land]

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LAND 500 is the first paid membership store introduced in the home appliance retail sector. Upon joining as a member, customers receive benefits comparable to the lowest online prices, and products are not sold to non-members. Membership levels are divided into Standard and Premium according to the annual fee, and it is characterized by providing 20 times more points than the existing free membership.

The reason Electroland introduced the paid membership store LAND 500 was due to poor performance. In the year before the introduction of LAND 500 (2022), Electroland's sales were 722.9 billion KRW, a 17.6% decrease compared to the previous year, and operating losses expanded to 10.9 billion KRW. The paid membership store was the card they played to overcome this situation.

The effect has been somewhat proven. The total sales of the 18 stores that Electroland converted to paid membership last year reportedly increased by 8% compared to the previous year. In particular, the LAND 500 Yangju Branch in Yangju, Gyeonggi Province, saw sales jump by 59%, and the 'LAND 500 Jakjeon Branch' in Jakjeon-dong, Incheon, increased by 53%. The company attributes this sales increase to store renovations and selling home appliances at the lowest internet prices.

Electroland's plan to expand LAND 500 this year is also interpreted as a judgment that the paid membership system has successfully landed, considering the sales increase and other factors. Another factor supporting the expansion plan is that the number of members who joined the paid membership at the 18 stores converted last year was 37% higher than the number of general membership subscribers at existing stores.

However, there is also a forecast that performance will not dramatically improve immediately with LAND 500 alone. The industry itself is deteriorating due to consumption stagnation caused by high inflation and high interest rates, and a real estate transaction freeze leading to decreases in moving and new household purchases. An industry insider said, "The market itself is dead," adding, "Unless external factors such as interest rates change, fundamental performance improvement seems difficult." Electroland's performance for last year will be announced around April.

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