Home shopping ups global presence

TV show hosts sell kitchenware on MNG Shop, GS Shop’s Turkish home shopping channel, in partnership with MNG Group of Turkey, in this file photo. GS Shop opened the 24-hour shopping channel in May. / Courtesy of GS Shop

By Park Jin-hai

Major home shopping channels have turned their sights abroad over the past few years, as the local market is near saturation point coupled with the rising level of competition.

Like CJ O Shopping, which pioneered the outward look with its entry into the Chinese market in 2004, Lotte Home Shopping and GS Shop have made similar moves. Their initial operating profits there were in the red, but their fortunes have been improving lately.

Not only do they make profit in the existing markets, they are competing in a race to expand their global presences from Asia to Europe on the back of “hallyu” or Korean wave.

The products that are selling also range from moving laundry racks to Korean kitchenware and cosmetics.

Industry watchers say there are several factors that contribute to the success of local home shopping channels abroad. Among them, is adapting to the needs and preferences of local customers.

CJ O Shopping is in operation in China, Japan, Thailand, Vietnam and India. And this year it has added Turkey to its overseas market with the goal of making it a springboard to plunge into Europe.

According to its sales record in 2012, revolving mops and laundry rack sold some 3 billion and 2 billion won respectively in India. Space-saving home appliances are also in great demand. They accounted for 60 percent of the total sales there. The Korean home shopping channels were able to gauge that the rapid urbanization and rising costs of living in India have created the demand for effective space management.

In Vietnam and Thailand, cosmetics took 20 percent of their total sales, more than four times those in other countries. There is high demand for mask packs, foundation and blemish balm cream in the countries where people are so keen on having light skins. The sales of kitchenware, in particular, among males in their 40s and 50s were strong in China, where males cook more than their other Asian peers. Nearly 90 percent of sales there came from kitchenware.

Equally important is the need to provide localized demonstrations in response to cultural diversity. For instance, in frying pan demonstrations in Korea, sizzling dumplings and meat-cooking demonstrations are often aired, while in Muslim countries like Indonesia and Buddhist countries like Thailand, seafood dishes take their place. In these countries, large sized pots for stews and woks for fried noodles sell well.

Some home shopping channels bring a lively Korean-style broadcasting format abroad to pitch up their sales. GS Shopping introduced eye-catching demonstrations, which immediately grabbed the attention of locals.

"It is fun to watch a Korean shopping channel. Instead of telling how good the item is like ours, it offers something to see by dynamic demonstrations," said Ran Aing, 28, a Vietnamese customer.

True GS, a Thailand affiliate of GS Shopping, invited locals to witness one of the demonstration broadcasts. They applauded in amazement when the stains of the burnt frying pans were gone in a whiz. In other related instances, a CEO of a blender appeared and showcased colorful Korean dishes and how the blender is used in the preparation.

Lotte Home Shopping, which entered the Taiwanese market in partnership with Fubon Group in 2004, dispatched camera crews, producers and show hosts to train local crews. Since 2011, some 10 overseas firms, including Vietnam’s VTC Group and Thailand’s CP Group, have visited its broadcasting center to learn about home shopping marketing know-how.

Companies also make use of corporate social responsibility (CSR) in their marketing activities. Lotte Home Shopping’s overseas success is in part attributed to its CSR activities, through which an improved corporate image led to sales increase.

The company provided voluntary medical services in Vietnam last year. In the latest case, it supported the restoration of the eye sight of an 8 year old girl through a cornea transplant. Touched by its charity activities, Nguyen Van Tam, 74, who is blind, decided to patronize the products of Lotte Datviet, Lotte Home Shopping’s Vietnamese unit as a demonstration of his support for the good work done by the company there.

Many companies are adopting the “shared growth” approach in dealing with small-and-medium sized enterprises (SMEs) in their overseas forays.

“Home shopping companies ensure sales routes for SMEs, which cannot secure them on their own, while SMEs provide high quality and reasonably-priced products in return,” said an industry watcher.

CJ O Shopping last year alone, for instance, supported about 100 SMEs in their overseas sales, while it gained 150 billion from overseas sales. They include IPKN, a cosmetics firm. Its signature IPKN Artistic Wave Foundation, which vibrates when applying the foundation, became a success in Japan and China, where it sold 2 billion won worth of its product last year. Lock & Lock storage containers, Happy Call’s frying pans, Hurom’s Juicer and Neoflam’s pots all benefited from home shopping channels’ shared growth strategies.