INTERVIEW LG fast adapting to changing home appliances
Shin Sang-yoon, CEO of Sprout Company, an in-house company of LG Electronics / Courtesy of LG Electronics
By Baek Byung-yeul
Since the outbreak of the COVID-19, the home appliance market has gone through changes as many people around the world are spending more time at home.
As more people in the world spend more time at home, demand for new home appliances have increased and manufacturers have been launching new gadgets that are more convenient for everyday life in response.
Though large-sized companies tend to become bureaucratic and slow to the fast-changing business environment, LG Electronics, one of the largest home appliance makers in the world, has been nimble in the midst of this turbulent period, swiftly launching new products that fit into the stay-at-home lifestyle.
One of the examples of is the LG StandbyME, a battery-powered TV. The height-adjustable TV, which was first launched in the Korean market and will be rolled out overseas later, has enjoyed a enthusiastic response here as the wireless TV can be moved around the home using a stand with wheels.
Another example is an in-house aqua farming system called LG tiiun, which allows users to grow various plants including flowers and vegetables at home.
It is interesting that a large company has launched a product with a concept fairly uncommon to the home appliance market ― hydroponics ― but what is even more attention-grabbing is that the product is developed by Sprout Company, an in-house LG company.
Introducing the plant grower, Sprout Company's CEO Shin Sang-youn said the in-house company is LG Electronics' first attempt to effectively develop a new market category.
“LG Electronics operates a Biz Incubation Center under the CSO division to find new business opportunities. The center has been supporting company-in-company (CIC) schemes such as Sprout Company, to help the in-house companies develop new products and commercialize them,” Shin told The Korea Times during a recent email interview.
LG supported several in-house companies with novel ideas and Sprout Company was able to launch the plant grower LG tiiun last October as the first product of the competition.
Sprout Company said the LG tiiun is a gadget that automates most of the plant cultivation process so that even beginners can easily grow their own plants. By installing a seed kit on the inner shelf of the device and supplying water and nutrients, consumers are able to grow plants themselves in four to eight weeks depending on the type of plant.
“The LG tiiun is the first example of LG Electronics' new CIC business model to foster new businesses and efficiently pioneer new markets. As the plant cultivator is required to sensitively figure out consumers' needs and respond quickly, LG decided to let the in-house company take charge of the business,” Shin said.
When asked if Sprout Company will be independent from LG in the future, the CEO said the in-house company “plans to operate flexibly as the business progresses further into the future.”
A model poses with Sprout Company's indoor plant cultivator LG tiiun. Courtesy of LG Electronics
Shin said the idea of people being able to grow their plants at home could be realized thanks to LG's advanced technologies and manufacturing capabilities.
“Unlike other plant cultivators, LG's advanced home appliance technology has been integrated to automate most of the complex plant cultivation process so that even beginners can conveniently grow various plants such as flowers, herbs and vegetables,” he said.
The machine is priced at 1.49 million won ($1,260). To make the device attractive to more people, LG has launched a rental service so that users can pay about 50,000 won per month for five years, or 40,000 won a month for six years. LG also sells 20 kinds of seed kits, including three kinds of flowers, 12 vegetables and five herbs, through its mobile app or at LG Best Shop retail stores.
Shin said the market for the in-house plant cultivator is still at an early stage, but thinks it has great growth potential.
“The indoor plant grower market is still in the early stages, so it is expected that it will take a little more time for visible data to come out, but the growth potential is very high. According to data by the Korea Invention Promotion Association, the domestic plant cultivation device market is expected to grow 50 times in four years from about 10 billion won in 2019 to 500 billion won in 2023,” he said.
The Sprout Company CEO said the LG tiiun is also ready for overseas markets. The product was well recognized in the global market as the company won an innovation award from the Consumer Electronics Show (CES). Taking the 2022 CES event as a starting point, Shin said LG will strengthen promotional efforts for the LG tiiun product.
“We are pleased to receive a good evaluation of the LG tiiun's differentiated technology and new concept of an in-house plant grower. It is expected that the lifestyle of more customers in the global market will change with this product,” Shin said.
“In regard to launching the product in overseas markets, we have been conducting market research activities and reviewing the timing of the launch. We are also implementing additional tests because the water quality varies from country to country. Starting with the 2022 CES, we are planning to start promoting activities for a global launch,” he added.
Sprout Company named the new device “tiiun” based on the Korean word meaning “sprouted.” For overseas consumers who may feel unfamiliar with the word, Shin said he hopes that international consumers may associate the product name with the English word “tune.”
“When we named the product, we hoped that the product can remind consumers of the meaning of 'living a new life.' If you pronounce 'tiiun' quickly, it is also read as 'tune.' So it was named with the hope that a life with plants would tune the balance of a users' life,” he added.