Samsung Electronics is expanding its home appliance subscription service from households to corporate customers including public institutions, hotels, medical and financial businesses. It said workplaces that need multiple appliances, such as restaurants, hospitals and bank branches, can use subscriptions instead of lump-sum purchases to shift procurement costs from upfront fixed costs to operating expenses. Samsung Electronics held a media day at Samsung Store Cheongdam on Sept. 28 to mark the second anniversary of its subscription service and launched the 'B2B Samsung AI Subscription' for corporate customers.

Sung-taek Lim (임성택), vice president of Samsung Electronics Korea Headquarters, said corporate customers seek subscriptions because of the structure of initial costs. He said entrepreneurs opening a restaurant or small office face a heavier fixed-cost burden if they buy appliances at once, and those costs ultimately turn into loan interest. He said equipment purchase costs can remain a burden at a time when a business needs to get on track. "With a subscription, it can be converted into operating costs," Lim said. "As initial investment costs fall, the probability of business success can gradually increase," he said.

He said the cost-saving effect is particularly large for workplaces that use many appliances for a long time. Samsung Electronics said it has set public rental housing, dormitories and lodging businesses as initial targets and is currently expanding the scope to the medical and financial sectors. Banks, government offices and hospitals typically use water purifiers, air purifiers and air conditioners, and many also use small refrigerators. Lodging businesses and offices also use PCs, monitors and printers, and some large companies use AirDressers for employee welfare. Samsung Electronics said these products require management of their usable life and involve large upfront costs, making them worth switching to subscriptions.

Samsung Electronics will provide these businesses with the 'B2B Samsung AI Subscription'. It also changed the subscription brand name on the day from 'AI Subscription Club' to 'Samsung AI Subscription'. Corporate customers can reduce the burden of upfront costs when bringing in products in bulk and receive up to 6 years of free after-sales service.

Corporate subscription customers will be offered a corporate management service called 'B2B Blue Pass'. Blue Pass is an integrated installation and after-sales service management offering that Samsung Electronics introduced to personal subscriptions in September last year. For corporate use, B2B specialist engineers from Samsung Electronics Service and Samsung Electronics Logitec manage products tailored to each company's operating environment.

B2B Blue Pass operates in line with a business site's hours. With the 'time-tailored intensive care' option, a bank with branches nationwide can designate late afternoons after business hours and have products at multiple branches managed at once. For example, a hospital where hygiene management is important can use '48-hour emergency dispatch', under which an engineer visits within 48 hours of an after-sales service request on a business-day basis.

It also includes an 'engineer assignment system' that assigns a dedicated engineer to each business site, and a 'one more service' that provides an additional free inspection of one Samsung Electronics product during a visit. Lodging facilities with multiple rooms can use the control service 'SmartThings Pro' to check the usage status of products in each space. Most of the services are aimed at reducing the time appliances are out of service.

Samsung Electronics said it has emphasised its management system in corporate subscriptions because appliance breakdowns at business sites can lead directly to revenue losses. "If you are trying to run a restaurant and the air conditioner suddenly goes out, can you do business?" Lim said. "Product or performance problems can be directly linked to sales," he said. "It may not be perfect at the start, but it will improve quickly," he added.

Lim also acknowledged that it is not easy for Samsung Electronics to maintain a management system that requires investment while offering discounts. Asked about securing profitability in a subscription business where multiple discounts such as advance-payment discounts overlap, Lim said it is "very difficult". Samsung Electronics is responding by bringing in partner companies to provide customer benefits together.

Even so, Lim said Samsung Electronics is focusing on subscriptions because "it is where the home appliance market needs to change" and that improving profitability and increasing sales are not the primary goals.

Samsung Electronics did not disclose the share of subscription sales or its B2B target share on the day.