Ryu Jae-cheol, head of LG Electronics' Home Appliance Division (President), declared a second leap forward with the introduction of artificial intelligence (AI) in household appliances, expressing ambitions to double sales within five years and become the number one appliance brand in Europe. While Ryu expressed concerns about the rapidly growing Chinese corporations such as TCL and Hisense, he also showed confidence, saying, 'it's not at a level we can't overcome.'
On the 4th, a day before the IFA 2025 opening, President Ryu Jae-cheol noted during a press conference held in Berlin, Germany, that 'LG Electronics has overcome fierce competition in the European market, achieving rapid growth over the past few years and gaining positive feedback from customers,' adding, 'We aim to double our European appliance sales in five years through qualitative growth and tailored product strategies, solidifying our position as the number one appliance brand in Europe.'
Europe is considered the largest appliance market in the world, alongside North America. According to the global market research firm Statista, the European appliance market size is expected to reach approximately 150 trillion won by 2025 and is projected to grow at an average annual rate of 4.1% until 2030, indicating strong growth potential. Ryu evaluated the achievements of LG Electronics' European appliance business, stating, 'We have overcome fierce competition and achieved rapid growth in the European market over the past few years while receiving positive feedback from customers.'
He further explained the qualitative growth strategy, stating that 'to maintain the strong growth trend of the European appliance business, it is essential to transition to a business structure characterized by low demand and price volatility, as well as guaranteed profitability, including B2B (business-to-business), D2C (direct-to-consumer), and Non-HW (software and services).' He emphasized the need to accelerate new growth businesses like B2B, D2C, and Non-HW to achieve the goals, stating, 'We will not only strengthen our strategy in the premium sector but also target the volume zone to achieve a quantum leap in both profitability and scale in the mature European market.'
In particular, in the B2B sector, LG Electronics plans to focus on cultivating the built-in appliance sector, considering the high demand for built-in appliances due to the narrow residential structures in Europe. Built-in appliances are a representative B2B market where construction companies supply appliances directly when building residential facilities, or companies specializing in interior materials also supply appliances.
When deciding on the brand supplying appliances, a comprehensive consideration of business stability, product durability, and maintenance capability raises the entrance barrier. However, with ongoing partnerships, it is possible to maintain large-scale revenue stably, which is important. LG Electronics has set a goal to increase its built-in sales in Europe tenfold by 2030, aiming to position itself among the top five brands in the estimated $24 billion European built-in market.
Meanwhile, he expressed confidence regarding the low-cost offensive by Chinese corporations and the encroachment on the premium market. Ryu stated, 'If LG Electronics optimally utilizes its factories in China, it can also compete in the affordable market,' adding, 'I do not view the influence of Chinese companies in the premium market as a significant threat.' He continued, 'The biggest threat is the rapid pace of follow-up, but if LG Electronics leverages the Chinese factory ecosystem and core component competitiveness, we can cover many aspects.'