ajunews Wednesday,21 February 2024

S. Korea's TV home shopping industry struggles to capture customers

By Park Sae-jin Posted : May 16, 2023, 13:46 Updated : May 16, 2023, 13:46

[Courtesy of Hyundai Home Shopping]

SEOUL --  Due to fewer people watching TV, South Korea's TV home shopping industry is struggling to capture more customers. Major home shopping show operators experienced a sharp decrease in operating profit.
 
South Korea's TV home shopping market which stood at 5.56 trillion won ($4.16 billion) in 2019 saw a slight increase of 5.9 percent to reach 5.89 trillion won in 2020 when people stayed at home and watched TV to avoid being infected by COVID-19. However, the market size decreased by 0.7 percent to hit 5.85 trillion won in 2021. The total sales increased by only 0.2 percent in 2022.
 
The country's TV home shopping market is mainly dominated by four major players -- CJ Onstyle, the commerce wing of South Korean conglomerate CJ, GS SHOP, retail giant GS Group's commerce division, Hyundai Home Shopping, the TV home shopping wing of Hyundai Department Store Group, and Lotte Home Shopping, the TV shopping show subsidiary of Lotte Group.
 
In the first quarter of 2023, Lotte Home Shopping suffered the biggest hit after the communications ministry banned the early-morning broadcast of shopping shows from February 2023 until the end of July. The company recorded sales of 231 billion won, down 16 percent from a year ago, and an operating profit of four billion won, which nosedived 87.6 percent on-year. Early morning shows that start at 2:00 a.m. and end at 8:00 a.m. are favored by elderlies who find it hard to sleep at night or those who wake up early in the morning.
 
The ministry's decision was made as a penalty for Lotte Home Shopping omitting the disclosure of information about its employee being engaged in a lawsuit for illegal solicitation and bribery during the re-approval process in 2015. Industry experts analyzed that the ban on early-morning shows dealt a heavy blow to the home shopping giant's sales.
 
Hyundai Home Shopping saw overall sales drop in home appliances, rental services, health supplements, and home-living product sectors to stand at 266.1 billion won, down 1.6 percent from the same period last year, and operating profit dropping 49.2 percent on-year to hit 17.9 billion won.

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