Nam Hyun-woo has worked as a staff writer at The Korea Times since 2013, mostly covering business and politics. He currently belongs to the Business Desk where he covers topics such as emerging tech, AI, ICT and Korea's chaebol community. Prior to joining the team, he was the paper's correspondent for the presidential office of Korea during the Yoon Suk Yeol and Moon Jae-in administrations.
CJ, GS, Hyundai scaling down overseas business
From left are CJ ENM O Shopping CEO Heo Min-ho, GS HomeShopping CEO Huh Tae-soo and Hyundai Home Shopping CEO Chung Kyo-sun.
By Nam Hyun-woo
By Nam Hyun-woo
The home shopping units of CJ, GS and Hyundai Department Store have failed in their overseas home shopping ventures and have closed multiple units after suffering continued losses, according to industry analysts, Friday.
CJ ENM, which runs the CJ O Shopping home shopping division, has opened home shopping markets in China, India, Japan, Vietnam, Turkey, the Philippines, Mexico and Malaysia since 2004, but has withdrawn from Guangzhou in China, India, Japan and Turkey due to deteriorating earnings there.
The remaining units' financial performances are also below what the firm expected.
SCJ TV Shopping, an outlet that CJ ENM set up in Vietnam, logged a 150 million won operating loss in the first quarter of this year, down from a 346 million won operating profit a quarter earlier.
CJ Grand Shopping, a Mexican unit, posted a 3 billion won net loss in the first quarter after an 852 million won net loss a quarter earlier.
GS Group's GS HomeShopping is also suffering. Since 2009, the company has opened units in eight countries, but liquidated its Turkish joint venture in 2017 due to accumulated losses.
GS HomeShopping is also in the process of bankrupting BUM TV, which it set up in 2015 as a joint venture in Russia with the country's state-owned telecom provider Rostelecom.
Big Universal Mall LLC, which runs BUM TV, posted a 956 million won net loss in the first quarter. Astro GS Shop, which runs Go Shop in Malaysia, logged a 635.6 million won net loss during the same period.
Hyundai Home Shopping has entered China, Vietnam and Thailand, but its Chinese business is virtually over, after its Chinese partner company suspended broadcasting abruptly in April 2016. Hyundai Home Shopping won a subsequent lawsuit, but is considering withdrawing from the country due to the prolonged hiatus.
Remaining units in Thailand and Vietnam also logged operating losses of 300 million won and 900 million won in the first quarter of this year.
Industry officials said the failure came amid overseas consumers' rapid transition to mobile shopping.
“One of the biggest reasons for their unsuccessful overseas ventures is that local consumers have moved to mobile commerce much faster than home shopping companies expected,” an industry official said.
“Korea has experienced the progress from offline shopping to TV home shopping, internet and mobile shopping, but consumers in the countries that the domestic home shopping firms are targeting have mostly skipped the process of TV and even internet shopping and gone directly into mobile shopping.”