February 24, 2025
SEOUL – South Korea’s funeral service industry is entering a new phase as sector-wide restructuring nears completion and new players join the market to target all-inclusive care for older people in an increasingly “super-aged” society.
The sale of Preed Life, the country’s largest death care service provider, currently owned by private equity firm VIG Partners, is expected to mark the conclusion of the government-led industry reorganization.
On Monday, VIG Partners announced that it had selected Woongjin Group, a mid-sized education-to-IT conglomerate, as the preferred bidder to acquire Preed Life.
With the deal expected to close in May, competition for market leadership is expected to intensify, as industry players are increasingly diversifying their services into areas such as travel, digital funerals and home appliance rentals.
VIG’s early bet
The funeral services market has been rapidly evolving, with nearly two in 10 South Koreans (8.92 million people) subscribed to prepaid funeral plans as of 2024.
VIG Partners recognized the sector’s growth potential early and began investing when the market was still undervalued. The firm made four major acquisitions, starting with Joun Life in 2016, followed by two more firms in 2017 and 2019.
“Back then, the industry was highly fragmented, with many firms run by individuals and some funeral service providers facing insolvency. We saw an opportunity for large-scale, trustworthy operators to meet the demand,” a VIG official said.
In 2020, VIG acquired Preed Life and consolidated its previous acquisitions under the Preed Life brand, establishing the country’s leading post-death service company.
“With Preed Life at the forefront, the industry is shifting beyond traditional funeral services toward becoming a comprehensive life care industry,” the official added.
The wave of industry restructuring gained momentum in 2019 when the government tightened regulations on funeral service operators following an increase in consumer complaints about poorly managed firms.
As a result, the number of registered funeral service providers plummeted from 230 in 2015 to just 78 in 2024, with smaller, financially unstable firms exiting the market, leaving the industry dominated by larger, more professionalized companies.
Growing interest in dying well
As the nation’s population ages and interest in end-of-life planning grows, new players are seizing emerging business opportunities in the funeral industry.
“The rise of the culture around ‘dying well’ and the growing number of elderly single-person households are key drivers of the funeral industry’s expansion,” said Park Do-hwi, a senior researcher at Samjong KPMG, in a report.
Industry data confirms this growth trend: the total value of prepaid funeral installment plans surged 170 percent over the past decade, reaching 9.45 trillion won ($6.55 billion) in 2024.
Since 2010, the industry has shifted toward bundling services, offering funeral plans packaged with home appliances, furniture and even luxury cruises, according to the KPMG report.
“A recent trend is the introduction of convertible funeral plans, allowing customers to exchange prepaid funeral services for education, travel or marriage-related services. Companies are also entering new markets, such as pet funerals and memorial jewelry,” Park explained.
New players, new services
Several nontraditional players are entering the industry, leveraging their existing customer bases and infrastructure to diversify funeral-related services.
Coway, a leading home appliance rental firm, is tapping into the funeral service industry, capitalizing on its strong rental customer base of over 10 million users and its 12,000 door-to-door salespeople nationwide.
In January, Coway launched a pilot program bundling home appliance rentals with prepaid funeral services. The hybrid subscription model allows customers to pay for both services simultaneously and convert their payments into funeral, travel or elder care services as needed.
Daekyo Newif, initially launched in 2022 as Daekyo’s senior care brand, became an independent entity in 2023, expanding its offerings from daycare and home visitation services to funeral assistance memberships.
Unlike most funeral service providers, which require prepaid installment plans, Daekyo Newif offers a post-payment model, allowing families to pay for funeral services after the event, reducing the financial burden on consumers.
The COVID-19 pandemic accelerated the rise of digital funeral services, prompting major industry players to embrace technology-driven memorial solutions.
Boram Sangjo, the second-largest funeral service provider in Korea, has expanded into digital funeral services, offering: online memorial halls for remote condolences, mobile obituary notifications, LED digital memorial portraits and memorial jewelry made from biological elements of the deceased such as hair and nails.