Facing declining TV viewership and high transmission fees, the home shopping industry is expanding its business scope through artificial intelligence (AI), mobile content, and overseas distribution. With growth through traditional TV broadcasts becoming increasingly difficult, companies are seeking new revenue sources. However, the burden of investing in new businesses has led to mixed results among firms.
According to industry reports, GS Retail's GS Shop recorded third-quarter sales of 253.2 billion won and an operating profit of 24.2 billion won, marking increases of 2.3% and 108.6%, respectively, compared to the same period last year. Strong sales of exclusive fashion and beauty products drove these results, which included a one-time VAT refund of approximately 8 billion won in operating profit. Lotte Home Shopping also saw sales rise to 226.8 billion won and operating profit increase by 27.6% to 13.1 billion won, thanks to a greater focus on high-margin products like health supplements and beauty items, along with cost efficiency measures.
In contrast, CJ ENM's commerce division, which operates CJ OnStyle, reported a 1.9% decline in sales to 348.9 billion won and a 46.8% drop in operating profit to 6.7 billion won. Increased investment in mobile new businesses and promotional costs negatively impacted profitability. Hyundai Home Shopping also experienced a slight increase in sales to 265.8 billion won, but its operating profit fell by 4.9% to 15.5 billion won.
While the industry's performance varies, a clear market downturn is evident. According to the Korea TV Home Shopping Association, the total transaction amount for seven domestic TV home shopping companies last year was 18.5053 trillion won, a 5.1% decrease from the previous year, marking four consecutive years of decline since 2021. Broadcast sales reached 2.6181 trillion won, the lowest level since 2012, with transmission fees accounting for 73.4% of broadcast revenue.
Home shopping companies are working to attract new customers through mobile and new business initiatives. GS Shop introduced an 'AI Shopping Assistant' in September to support product searches, review summaries, and price and ingredient comparisons. CJ OnStyle launched a platform called 'Ontner' to connect creators and brands, expanding its short-form and live commerce business. In the third quarter, CJ OnStyle's mobile content commerce volume reached 163.4 billion won, a 104.1% increase. Hyundai Home Shopping is also enhancing its mobile live commerce platform 'Shora' and membership benefits.
The expansion of home shopping companies into overseas markets is also increasing. Last month, CJ OnStyle opened a global mall specializing in K-lifestyle products targeting the U.S., Hong Kong, and Singapore, with plans to expand services to France, Japan, and Taiwan by the end of the year. They are collaborating with French retailer Leclerc to operate local offline stores.
Lotte Home Shopping launched a K-brand export platform called 'Isul,' opening pop-up stores for small and medium-sized enterprises in Los Angeles in July and Paris in October. The Paris event featured over 40 brands from 33 SMEs. Hyundai Home Shopping reported approximately 12.2 billion won in export consultations with 15 K-beauty brands in Hanoi, Vietnam, in July.
An industry insider stated, "Breaking away from a TV-centric business structure and securing new revenue sources is a common challenge for the industry. The key will be whether the growth in mobile and overseas businesses can be translated into actual profits."
* This article has been translated by AI.
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