Demand for Rental Products Soars

Leased and rental products are becoming increasingly popular in a country where more and more people live alone and spending money is tight amid record household debt.

Korea's No. 1 supplier of rental products, Coway, launched a new service last month renting out clothes fresheners, a product dominated by LG. "We added an air purifier and humidifier function to clothing fresheners and provide filter changes at regular intervals," it said.

Coway clothing fresheners costs more than W2 million to buy but can be rented for less than W50,000 a month (US$1=W1,117). Some 2,000 units have been rented just two weeks since the service was launched.

Coway, SK Magic and Chungho Nais compete in Korea to rent out household goods and are expanding their range to air conditioners, dryers, mattresses, pet products and beauty equipment. The number of rental customers surpassed 10 million last year, and the lease companies achieved record earnings during the first six months of this year.

Clockwise from top, an art work rented by Open Gallery, a clothes refresher by Coway and an automatic pet feeder by Lotte Rental

According to a study by KT Economic Research Institute, the market for rental appliances here is expected to grow from W31.2 trillion this year to more than W40 trillion in 2020.

Lotte Rental in April started renting out pet appliances, sound systems and golf products on its website, and orders grew almost seven times last month compared to the same period of 2017.

"The cumulative number of visitors to our website recently surpassed 3.5 million after we expanded the range," a staffer said.

Kyowon Wells rolled out rentals of a plant-cultivating device called Wells Farm, which allows customers to grow hydroponic vegetables in their home under LED lamps. Consumers get free supplies of seeds for vegetables such as bok choy and sweet basil every two months. It costs between W27,900 and W39,900 a month.

A Kyowon staffer said more than 7,000 customers rented the set just two months after it was unveiled.

Chungho Nais started renting out air conditioners in July, and SK Magic rents out 10 home appliances including clothes dryers, gas ovens, dish washers and microwave ovens.

The domestic market for rental products only started during the 1998 Asian financial crisis, promoted by door-to-door salesmen. Most loyal customers were middle-aged or older, but that is changing with the rapid increase in single households.

"Young singles spend lavishly on themselves, and we’re targeting this demographic by expanding our product range to include even artworks and beauty products," a staffer with a rentals firm said.

A start-up called Open Gallery already rents out works by established artists for W39,000 a month and changes them every three months. "We started off offering 100 works of art and now have around 20,000," an Open Gallery staffer said. "Many of our customers say it costs less to hang a work of art on their walls than it does to fix the interior décor."