GS Shop eyes Asian expansion
By Kim Yoo-chul
GS Shop, the country's biggest operator of cable television shopping platforms, is looking to expand its business to international markets to pursue growth beyond the saturating local market.
The initial targets are China and Southeast Asian countries where television shopping services appear to be on the verge of explosive growth, according to the company’s chief executive Huh Tae-soo.
GS Shop recently established a joint venture in Thailand, called True GS, as it looks to tap into the business networks of local partners, The Mall Group, CP All and TrueTelevision.
Truevision owns 45 percent of the company, while GS is the second-largest shareholder with a 35 percent share.
True GS will begin providing 24-hour television shopping services from the latter half of this year, with its coverage expected to reach 7 million households.
``Truevision’s marketing chief will lead the entity. GS’s senior manager Kang Tae-lim will serve as the chief operating officer (COO),’’ said Seo Joo-hui, a GS spokesman, who declined to comment on detailed business goals.
``GS Shop will handle the overall management of the television shopping operators, while Truevision will handle the platform itself. The Mall Group will be in charge of product sourcing, while CP All is in charge of logistics,” he said.
Industry analysts believe it would be crucial for GS to get a head start in Thailand’s underdeveloped television shopping market, which observers say has immense potential. GS Shop is already established in China and India.
``The key for GS is to gain a reputation for quality products. Shopping channels can be popular in Thailand, but the venture will only take off if GS guarantees the quality of the products that are sold through the networks,’’ said Park Jong-ryeol, an analyst at HMC investment.
GS Shop posted 799 billion won in revenue last year, a 15.2 percent increase from 2009. The company’s operating profit last year increased by 18.5 percent over 2009 to 117 billion won.
Television shopping is expected to be a lucrative market in developing Asian nations, where customers are increasingly looking for bargains.
According to a survey conducted by market researchers Loudhouse and RightNow, price is a more influential purchasing factor for Asian customers than brand recognition in times of economic slowdown.
``GS Shop’s strength is in its marketing ability to deliver products that provide bang for their buck,’’ Park said.
In 2009, GS Shop established a joint venture, ``HomeShop 18,” with a partner in India to launch the country’s first 24-hour television shopping channel for viewers in New Delhi and Mumbai.
Since 2010, the company has been offering products via ``CP Lotus’’ in China, which it says has helped Korea’s small and medium-size businesses promote their products to Chinese customers.
``We are in talks with several players in China who have home shopping licenses to expand our presence in China’s home shopping markets,’’ Seo said.