As negative factors such as a decline in TV viewers and rising transmission fees pile up in the home shopping industry, forecasts say major home shopping companies will post weak results this year. To overcome the headwinds, the industry has turned not only to adopting artificial intelligence (AI) systems and using short-form platforms but also to offline expansion and collaborations based on intellectual property (IP).
According to the consensus from financial information provider FnGuide on the 23rd, Hyundai Home Shopping's sales are projected to fall 2.37% from a year earlier to 3.7623 trillion won this year. According to IBK Securities, sales in the home shopping institutional sector within GS Retail are expected to drop 3.4% on-year to 1.0139 trillion won.
CJ OnStyle and Lotte Home Shopping are expected to see sales grow but operating profit decline. Samsung Securities projects that this year's sales in CJ ENM's commerce institutional sector will rise 4.3% from a year earlier to 1.5136 trillion won. In contrast, operating profit is expected to decrease 2.4% from last year. According to Daishin Securities Co., sales in Lotte Shopping's home shopping institutional sector are forecast at 927 billion won, up 0.2% from a year earlier. However, operating profit is projected to fall 4% on-year.
In response, the home shopping industry is seeking breakthroughs by entering the offline market. Hyundai Home Shopping recently unveiled Coasis, the industry's first offline beauty select shop. The plan is to differentiate in the offline beauty market by leveraging TV home shopping's price competitiveness and a wide product lineup. The store showcased more than 800 beauty items. In addition to beauty products previously offered on TV home shopping or Hyundai H Mall, it launched Coasis-exclusive planned products. In the second half, it also ran VIP Culture Class, an offline experience program for VIPs.
CJ OnStyle has pursued collaborations across fields with a focus on IP-based products. CJ OnStyle said new customers are flowing into the mobile app through sports (KBO), tvN drama, and global character IPs. Recently, it exclusively launched in Korea Ohana Hatake, the footwear brand of global contemporary artist Murakami Takashi. It also held a mini fashion show inviting about 30 VIP mothers and daughters. A CJ OnStyle official said, "As customer tastes become more segmented, the value of influential IP-based products is growing."
GS Shop is seeking to strengthen competitiveness this year by pushing its own private-label fashion brands, including Renecrew, SOUL, and BUNTROI. Core Authentic, a proprietary brand launched last year, recorded 80 billion won in orders this year, up 160% from a year earlier. Another exclusive brand, La Piaf, posted 66 billion won in orders, up 10% on-year.
Lotte Home Shopping is accelerating diversification of its business portfolio, including brand exclusive distribution rights, expansion of IP-based businesses such as the in-house developed character Bellygom and collaborations with celebrities and artists, and discovering new businesses through in-house ventures. In particular, it is focusing on strengthening its role as a channel connecting domestic and overseas markets, including AIGLE, a French outdoor brand for which it has secured exclusive distribution rights. Last month, it opened an AIGLE offline pop-up store (temporary shop) on the fashion street in Hannam-dong, Yongsan District, Seoul, where fashion demand is high. Next year, it plans to expand offline touchpoints by opening a flagship store and more.
An official in the home shopping industry said, "This year, a decline in TV viewers, intensifying competition in e-commerce, and the burden of transmission fees overlapped to stall performance improvement," adding, "We will improve profitability through operations focused on high-efficiency products and by shifting channels to mobile-centric."