In today’s Finshots, we tell you if the big bet on appliance subscriptions could be viable in India.

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The Story

A few days ago, Bloomberg ran an interesting story about LG and Samsung trying to pull off a Netflix-style model for home appliances.

The idea is simple. Pay a monthly fee, get the latest fridge, washing machine or microwave and when you’re bored or want something fancier, swap it for a newer model. No long-term commitment. No big upfront cost.

And in South Korea, this appliance subscription business has taken off for LG. In 2024 alone, it pulled in nearly ₩2 trillion (about ₹12,000 crores). That’s a massive 75% jump from the year before.

But here’s what really caught our eye. Subscriptions still made up just 4% of LG’s annual revenue in its consumer electronics business. Which means there’s a long road ahead. And that’s probably why LG has already launched this service in Malaysia, Taiwan and India, with plans to expand further in other Asian countries. Samsung has jumped onto the bandwagon too. 

And that got us thinking. Can this idea really click in India, with people subscribing to a fridge or a washing machine just like they do to Netflix or JioHotstar?

If you go by LG’s own pitch, there’s plenty of room for growth here. In its Draft Red Herring Prospectus (DRHP) filed in December 2024 for a potential ₹15,000 crore IPO, it made a solid case.

For starters, India’s appliance rental and subscription market was already worth ₹8,300 crores in 2023. And if things go well, it could nearly triple to ₹29,000 crores by 2028, growing at 28% a year. And according to LG, it’s being driven by three simple things.

One, urban lifestyle changes. India’s cities are swelling with young professionals who love flexible living. For them, renting appliances makes sense. No lugging heavy fridges around. No selling off an old washing machine on OLX. Just easy, on-demand upgrades.

Two, it’s financially smarter because let’s face it, appliances are expensive. Subscriptions take away the pain of big upfront costs and even repairs.

And finally, rising incomes mean rising expectations. As India’s middle class grows, so does its appetite for premium, fancy appliances. Subscriptions make it easier to access these without blowing up your budget.

And honestly, LG’s optimism doesn’t seem misplaced, especially if you look at how India’s appliance rental startups have shaped up over the years. 

Take Rentomojo, for instance. It started off as a furniture rental platform but soon branched into electronics, appliances and even e-scooters. Appliances quickly became its biggest revenue driver, contributing 40% to sales. By FY23, it turned profitable with ₹6 crores in profits and grew revenue by 22% to ₹121 crores. FY24 was even better. Revenues jumped 60%, and profits soared 267%! Cityfurnish, another player in the same game, has also been on a steady growth track, with rising revenues and shrinking losses.

So yeah, it does feel like there’s a solid case for this model.

But that’s only one side of the story. When you flip the glass around, you’ll see that there are plenty of hurdles LG will need to clear if it wants to crack India’s underpenetrated and tricky appliance subscription market. Because while the subscription economy might sound shiny on paper, the numbers sometimes hide what’s really happening underneath.

Let’s put it this way. In 2024, India’s OTT (over the top) penetration hit 40% or about 55 crore people. That’s a one third jump from 2023. But here’s the catch. Only 20% actually paid for subscriptions. And that number barely budged from the year before. Now sure, streaming and appliances aren’t the same thing, but it reveals something crucial. Indian consumers are value conscious. They’d rather pay when they need something, than stay subscribed and keep paying for something they might not use continuously.

And if that’s how it is with software subscriptions, it’s an even bigger problem for hardware or appliance subscriptions, especially in a country as massive and diverse as India.

Logistics is a monster. If a business is renting out bulky appliances, there’s going to be a flurry of returns and deliveries happening every single day. Imagine 100 customers sending back used fridges, washing machines and ovens daily. These need to be picked up, stored, cleaned and fixed before they can head out again. And if that chain breaks, like if a fridge arrives dented or a washing machine doesn’t work right, it can ruin the whole customer experience.

We’ve already seen this in the furniture rental space. Startups like Rentomojo and Furlenco promised furniture that’s ‘as good as new’, but customers often ended up with scratched beds, wobbly tables and broken sofas. Now apply that same risk to appliances, where reliability is non-negotiable and it’s a full blown headache.

That risk is even higher because, as The Ken puts it nicely,

...consumers are less likely to care for something they don’t own. And with the target cohort being that of young bachelors, it is common to find cigarette burns and food spills that need the entire upholstery to be changed.

And if that’s the ‘subscription experience’, people will drop off faster than you can say Netflix.

Then there’s the matter of competition. And one big player here is co-living spaces. These setups have taken off in Indian metros because they’re super convenient and often cheaper than renting an apartment and setting it up yourself. A Stanza Living room in Bengaluru’s Koramangala for example, costs around ₹20,000 a month including meals, electricity, Wi-Fi and housekeeping.

Now compare that to renting an unfurnished apartment for the same price. You’ll probably have to cough up a six-month security deposit, spend extra on furniture and appliances, whether you buy or rent them, and deal with additional housekeeping expenses. So, for a lot of youngsters moving to a new city, a co-living space feels like a no brainer. And that naturally shrinks the room for the appliance rental market to grow.

Also, let’s be honest, this market is pretty narrow. Appliance subscriptions mostly make sense in tier 1 cities where people move around for work. In tier 2, tier 3 towns and smaller places, it gets tricky. People there aren’t necessarily chasing the latest high end gadgets. And here’s the thing. Buying appliances has become a lot more affordable too. Almost every retailer offers easy EMIs now, along with festive discounts and cashback deals that soften the upfront cost. So, owning something decent doesn’t feel like a financial burden anymore.

And if you’re thinking, “Okay, but owning stuff is a hassle when you have to move”, well, renting or subscribing hasn’t exactly cracked that problem either. Appliance rental startups have had their fair share of complaints, from delayed pickups that sometimes stretch for months, to early-return penalties like charging a full month’s rent if you want to end your plan. So people naturally think, “If I have to deal with all this anyway, why not just own it?”

That said, LG might have a shot if it plays its cards right. The company’s already a heavyweight in India’s electronics and appliances space, with over 25% market share in categories like washing machines, fridges, microwaves, TVs and water purifiers. Plus, with a potential IPO in the pipeline, it’s got the capital muscle to back its ambitions. If it can pump resources into streamlining logistics, fixing the customer experience and making subscriptions genuinely hassle free, it might carve out a niche, at least in India’s metro cities.

Whether they pull it off or not… well, we’ll just have to wait and see.

But until then, appliance subscriptions in India will remain a cool idea on paper.

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