Living Made Easy with Levande: An appliance subscription platform powered by Electrolux
- November 17, 2022
by Gaurav Julka
SHIFT TOWARDS MORE RESPONSIBLE LIVING
When household appliances first started to revolutionise homes globally, the main focus was to save time to ease the burden on homemakers. Fast forward to the present day, and the global household appliance market is now expected to respond to a plethora of consumer demands, not least sustainability.
In response to the digitalisation of the world, combined with a growing middle class and increased consumer spending, there’s been a clear shift in consumer priorities when it comes to choosing home appliances.
Two-thirds of global consumers are now willing to pay more for sustainable products5 and 90% of consumers are willing to pay more for a brand that gives back to society3. The pandemic has certainly accelerated this trend, with almost three out of every four global consumers thinking it is more important for companies to behave sustainably now, than they did before the Covid-19 pandemic6 . A similar proportion also believe that they have a responsibility to reduce their own personal carbon footprint. While these changes require manufacturers to continually invest to innovate, and require economies of scale, they also present significant opportunities.
As a global leader in household appliances, Electrolux is committed to continuously working to be a Better Company. With safe and resource-efficient operations, it aims to reduce it own footprint, as well as that of its suppliers’. Electrolux is committed to investing in a diverse and inclusive workforce built on its strong ethical foundation.
The company strives to create Better Solutions, with products and services that enable people to save energy, water and resources every day, while also helping to foster a more circular economy. Across the world, Electrolux strives for Better Living, inspiring and empowering consumers to make choices that will help them live more sustainably. A key part of this is recognising the need to tackle the growing problem of E-Waste. In Singapore alone, a staggering 60,000 tonnes of e-waste is disposed of every year7 – the equivalent of every consumer discarding approximately 70 mobile phones per year.
Such data points inspired Electrolux to explore a new circular business model, addressing consumer needs and the growing environmental impact of them.While none of these challenges are small, Electrolux believes that by working together with consumers and other key stakeholders, it can continue to make a lasting, positive difference.
CORPORATE VENTURING: AN INNOVATIVE APPROACH TO DEVELOPING AND SCALING NEW BUSINESS MODELS
The concept of a circular business model where consumers rent or subscribe to appliances as a service (instead of buying them) isn’t new. However, still today, it has a relatively low adoption rate – perhaps in part due to consumers being conditioned to replace rather than repair. Increasing the likelihood of repair also requires manufacturers to commit to using more common parts in appliances. Parts that are easily sourced and less frequently discontinued (even years after an appliance has been bought).
Having identified this as an industry-wide problem, Electrolux saw the opportunity to challenge consumers’ desire for the new and explore how a circular business model (almost exactly the opposite of its current operating model), could be viable. That’s when the global leader in home appliances applied for the Singapore Economic Development Board’s (EDB) Corporate Venture Launchpad programme. The Electrolux leadership team backed the application, seeing it as an opportunity to validate its hypothesis through a series of concept validation sprints.
The Corporate Venture Launchpad programme allows participating companies to choose from a range of appointed venture studios to bring venture-building experience, methodologies, and multidisciplinary talent to support companies in building a new venture from Singapore with the potential to scale into globally leading businesses. Electrolux partnered with FutureLabs Ventures, to accelerate its foundation and support its concept validation sprints.
The unique combination of FutureLabs’ entrepreneurial talent, proven and stage-gated methodology to discover new opportunities and its ability to provide an objective perspective, enabled Electrolux to validate its concept at pace. FutureLabs provided real-life (end-consumers’) feedback, in addition to active venture governance to help Electrolux incubate its new business concept from scratch and bring it to market in less than five months. After feedback from over 800 consumers, data crunching, and business modelling – Levande was born.
“For corporate ventures to be successful, one of the key challenges we face is bringing a mindset shift around the inherent risk taking that is required to pursue a new venture. We take a deep market-backed view of each opportunity, provide an independent assessment, and co-invest in projects which meet our criteria to help companies reduce their risk profile and can challenge the norm with confidence and objectivity,” commented Usman Lodhi, Venture Partner, FutureLabs Ventures.
“It was great to partner with Electrolux. From the start, the team was open to exploring new ways of building its venture and all stakeholders were committed to putting the relevant support behind it to see it through,” added Lodhi.
OWNERSHIP: REDEFINING THE RELATIONSHIP BETWEEN CONSUMERS AND APPLIANCES
Naming the new corporate venture ‘Levande’, which in Swedish means ‘Living’, built an instant connection to the parent brand, and took the team one step closer to actualising Electrolux’s purpose to Shape Living for the Better.
Levande essentially turns the appliance ownership model on its head by offering consumers a fully flexible end-to-end appliance subscription service inclusive of: setup; delivery; service and a 48-hour guaranteed like-for-like replacement policy. Levande provides its customers with complete peace of mind, as well as saving them the significant upfront costs associated with buying an appliance new. Its subscription plans are available at a fixed monthly fee to provide customers with appliance flexibility to enjoy the latest on the market, upgrade or cancel the subscription at any time.
Levande offers the rental of home appliances such as dishwashers, air purifiers and washing machines. When customers have finished using their appliance, they can simply have the appliance picked up and returned – all included in the fee. Levande also offers its subscribers the option to have the business collect and dispose of other commonly unregulated home appliances like air purifiers, vacuum cleaners etc. (irrespective of brand), ensuring that many more appliances are handled and disposed of correctly at the end of their life to reduce their impact on the planet.
“Levande is a great example of how an established organisation (such as Electrolux) with over 100+ years of industry knowledge under its belt, is taking an active role in shaping its future and possibly that of the industry. Levande goes well beyond being a simple subscription-based business model. Its ability to engineer sustainability across its entire operations is what sets it apart. From providing complimentary maintenance to ensure appliances last longer, and the sale of refurbished products to give them a second life, to free installation so Levande can easily dispose of (and in the future possibly eliminate) packaging. These are just a few examples of how the new corporate venture is in tune with what consumer need and also want. In just a matter of months since launch, sales targets have been exceeded,” commented Mario Aquino, Managing Partner, FutureLabs Ventures.
We are on a mission to empower people to live more sustainably and help reduce electronic waste in landfills. By offering an all-in-one appliance subscription service, we are reshaping how people own appliances today.
Our appliance subscription covers set-up, delivery, servicing, and a 48-hour replacement guarantee – giving you total peace of mind.
We aspire to maximise resource efficiency by recycling and reusing appliances as we advance towards a circular economy. By subscribing, you can help reduce the growing mountains of e-waste and contribute to a more sustainable future.
Levande is an appliance subscription platform powered by Electrolux.
Electrolux is a leading global appliance company that has shaped living for the better for more than 100 years.
We reinvent lifetime taste, care and wellbeing experiences for millions of people, always striving to be at the forefront of sustainability in society through our solutions and operations.
In 2021 Electrolux had sales of SEK 126 billion and employed 52,000 people around the world. Our headquarters are located in Stockholm, Sweden, and the Electrolux share (ELUXb) is listed on Nasdaq OMX Stockholm.
Under our brands, including Electrolux, AEG and Frigidaire, we sell approximately 60 million household products in over 120 markets every year.
ABOUT FUTURELABS VENTURES
FutureLabs is a pioneer of corporate venture building with 20+ years experience in this sector.
We partner with leading corporations to build and scale next-gen digital ventures by bringing the best entrepreneurial talent, latest technology, and our own co-investment capital.
Over decades of experience, we have perfected our venture building platform to overcome key reasons why start-ups fail and turn corporate assets into real advantages for our ventures.
We have built 30+ digital ventures with leading companies such as ING, Julius Baer, DHL, Cargill, Electrolux and more, and generated a distinctive track-record of 3 in 4 opportunities becoming scalable businesses, with several reaching multi-$100M valuations.
ABOUT EDB CORPORATE VENTURE LAUNCHPAD
The Corporate Venture Launchpad 2.0 (“CVL 2.0”) is an expanded S$20 million programme designed to enable companies to launch a new venture from Singapore. Participating companies will partner with EDB-appointed venture studios that have best-in-class expertise, proven track records and diverse venture-building offerings.
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