A growing number of Korea’s kitchen furniture builders and home appliance makers are teaming up to help each other, as well as themselves.
The display of laundry machines, dryers and gas ovens by one electronics firm in model kitchens built by another furniture maker is becoming a common sight. When customers move into a new place, they are more likely to renovate their kitchens with new furniture and big appliances, and Korean companies selling those items are banking on this new trend.
LG Electronics Inc., Korea’s second-largest electronics company, and Hanssem Co., the nation’s No. 1 kitchen furniture maker, are the latest companies to become partners.
They signed a contract yesterday to work on joint marketing and development of major home appliances. LG will produce refrigerators and dishwashers designed to fit into Hanssem’s kitchen and will display these products in 300 Hanssem Kitchen Plaza stores.
Enex Co., which produces kitchen and bathroom furniture, also teamed up with LG Electronics last month and began displaying its items at six LG Electronics Hi Plaza shops. The two firms collaborated on catalogues promoting their respective kitchen furniture and home appliances.
Woongjin Coway Development Co., well known for its line of water purifiers, entered kitchen furniture business last October by launching a new line called Bussel. It has signed on with Samsung Electronics Co. to display its kitchen furniture models alongside Samsung’s appliances at Samsung Electronics Digital Plaza shops in Apgujeong, Seoul, and Anyang, Gyeonggi province.
Cho Jin-man, senior executive of the living culture department at Woongjin, said the company is in discussions with Samsung Electronics to have Samsung products on display at 11 Bussel shops across the nation.
The growing number of partnerships can be explained by the struggles of both sides. In the past, the cooperation between the two industries did not go much beyond furniture shops’ providing phone numbers of nearby electronics stores for customers, but slow sales have forced them to help each other.
Home appliance makers, which used to reap 90 percent of their entire big-appliance sales from deals with apartment construction companies, had to look for other sources for profit as construction tailed off. And for kitchen furniture manufacturers, whose combined annual sales have stalled at around 1.4 trillion won ($1.4 billion) for the last three years, they needed to broaden their distribution network.