CJ Onstyle to close all overseas outlets

A show host explores CJ Onstyle's shopping platform on his mobile phone in this YouTube video released by CJ ENM, April 29. Korea times file

By Kim Jae-heun

CJ Group's home shopping unit CJ Onstyle plans to close all its overseas outlets to save costs amid its shift towards digitization.

In 2020, CJ Onstyle started by closing its physical sites in the Philippines, Mexico and Malaysia; while this year it decided to stop operating Dongbang CJ, a joint venture established in Shanghai with a local firm there in 2004. CJ is preparing to sell off its shares in Donbang CJ.

“Our overseas home shopping business has shown tepid growth, and we face a lot of difficulties in maintaining such an unprofitable business. So we decided it would be better to reorganize our corporate structure to seek better profitability,” a CJ Onstyle official said.

Another factor behind its departure from overseas markets is that the continued COVID-19 pandemic has changed consumer purchasing patterns with many having no option but to rely on online mobile platforms when shopping.

Its plan also came a few days after Chairman Lee Jay-hyun called for group affiliates to begin “emergency management” by dropping unprofitable and money-losing businesses. Lee dropped his earlier signature “Great CJ” business initiative, and ordered senior management at group affiliates to improve their financial status.

“We were told to close businesses that have no growth potential. CJ will continue to improve its corporate structure for at least one more year,” the CJ Group official said.

The situation isn't so different for Hyundai Home Shopping. Its Australian affiliate, which the company established back in 2019, is facing insolvency, after reporting 7.5 billion won in sales for the first six months of the year, but a cumulative operating loss of 7.1 billion won over the same period.

“Platform operators can sell their items through live commerce non-stop. Live commerce is the future of TV home shopping,” Seo Yong-gu, an economics professor at Seoul's Sookmyung Women's University, said.