LG Elec. targets North American digital healthcare market

South Korea’s LG Electronics Inc. has made inroads into the North American digital healthcare market with US telehealth company Amwell as the global home appliance giant targets the industry for future growth.

LG North American Innovation Center (LG NOVA) of the South Korean company and Amwell, formerly known as American Well, have agreed to jointly develop new device-based service solutions designed to make it easier for patients to access medical care, whether in a hospital or at home, according to a statement earlier this month.

Both companies first aimed to sell remote medical treatment solutions to US hospitals that bought smart TVs for hospital wards from LG Electronics.

“The ultimate goal of the LG-Amwell alliance is to develop devices and solutions that give customers access to high-quality medical services anytime and anywhere,” said a source at LG Electronics on Monday.

DIGITAL HEALTHCARE BUSINESS EXPANSION

Amwell, founded in 2006, is a leading telehealth platform in the US and globally, connecting and enabling service providers, insurers, patients, and innovators to deliver greater access to more affordable, higher quality care.

LG Technology Ventures, the venture capital of South Korea’s fourth-largest conglomerate, participated in Amwell’s fundraising as a strategic partner in 2020.

LG Electronics accelerated the expansion of the healthcare business. The company established a digital healthcare research center with the Korea Advanced Institute of Science and Technology in South Korea late last year to develop basic technology for the sector and seek new business opportunities.

The firm is also collaborating with local companies. It unveiled a telemedicine solution for hospitals in cooperation with a digital healthcare platform ezCaretech Co. The solution is based on a video conferencing platform linked to hospital systems such as hospitalization and discharge databases.

TARGETS $427 BILLION MARKET BY 2027

LG Electronics is zoning in on the digital healthcare business, given the market’s size and growth potential. The global digital healthcare industry was forecast to nearly triple to $426.8 billion by 2027 from $148.1 billion in 2020, according to market research and strategy consulting firm Global Market Insights. The market in North America was predicted to grow 16.2% a year on average in the next five years.

“LG Electronics’ key business of home appliances has slow growth and is vulnerable to external factors such as volatile commodity prices,” said an industry source. “To secure stable profits, it has no choice but to look to new sectors such as healthcare.”

LG Electronics has been closing loss-making or unpromising sectors to focus on future businesses. The company decided to drop its automotive wireless smartphone charging division as it exited from the loss-making mobile phone business last year.

Last month, it announced a decision to withdraw from the solar panel industry in the face of deepening competition and sluggish sales.

Write to Hyung-Suk Song at click@hankyung.com
Jongwoo Cheon edited this article.