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| Home-shopping hosts of Lotte Homeshopping sell fashion apparel on a cable television network in this 2021 file photo. Courtesy of Lotte Homeshopping |
By Kim Jae-heun
Local home shopping companies are struggling amid falling TV viewership as more people buy goods online, according to industry officials Friday.
The emergence of e-commerce companies and increasing transmission fees paid to broadcasting operators are also adding to home-shopping channels' financial burden.
According to data released by the Financial Supervisory Service, three major domestic home shopping firms showed poor business performance in 2022.
Lotte Homeshopping's sales and operating profit in 2022 decreased year-on-year by 2.3 percent and 23.5 percent, respectively, to mark 1.07 trillion won ($828.9 million) and 78 billion won.
CJ OnStyle also saw its revenues and operating profit decrease 1.7 percent and 39.7 percent to 1.35 trillion won and 72.4 billion won, respectively, in the same period.
Hyundai Homeshopping's performance was not too different. Both its sales and operating profit dropped by 2 percent and 15.8 percent, respectively, to record 1.1 trillion won and 112.7 billion won last year.
"We have taken early action to make a digital transition by strengthening live commerce on the internet centered on mobile phones but it did not help our performance to improve," a Hyundai Homeshopping official said. "In particular, if we do not solve the problem of potentially increasing commission fees of radio transmission, the company's profit increase will not happen anytime soon."
The three companies' falling profitability is attributed to shrinking TV audiences.
According to the Korea Communications Commission, its 2021 survey showed 70.3 percent of participants picking smartphones as the most essential media in daily life and the rest choosing television.
Their average time watching television also decreased 13 minutes year-on-year, to record 2 hours and 13 minutes a day, as of two years ago. Considering that many people have been spending time outside after the government lifted social distancing rules last March, the agency expects to see home shopping firms' TV viewership decline even more for 2022.
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