KUALA LUMPUR: Astro Malaysia Holdings Bhd (fundamental: 1.1; valuation: 2.1) expects its 60:40 joint venture with Korean multimedia retailer GS Home Shopping Inc — Go Shop — will generate RM500 million in annual revenue by 2019.
Go Shop is a 24-hour shopping service launched in November on Astro’s television channel 118 and leverages Astro’s penetration of 4.3 million households, with about 17 million potential customers.
Since the soft launch of Go Shop, Astro has garnered 72,000 customers and sold more than 115,000 products, said Astro chief executive officer Datuk Rohana Razlan.
This is encouraging, she said, given that Astro has not promoted Go Shop much.
“The initial response has surpassed our internal targets. We hope the trajectory will continue. Today, 55% of Internet users in Malaysia shop online and across multiple devices and this is anticipated to grow significantly as broadband penetration grows,” Rohana said after the official launch of Go Shop and its online counterpart last Friday.
Astro expects to garner 800 new Go Shop customers every day. So far, 60 products ranging from cosmetics, fashion, kitchenware to household items are available to Go Shop customers, which will be doubled next year. Delivery is free in Peninsular Malaysia.
Rohana said Astro plans to work with local small and medium enterprises in the future to market their products on the platform.
On the saturation of online shopping sites, Rohana said Astro aims to offer targeted products to targeted customers.
“Our Go Shop addresses the middle to top end of our customer base, and that’s about two million people. If you look at the single purchases, they range between RM200 and RM300 — fairly premium products,” she added.
GS Home Shopping Inc chief executive officer Huh Tae-Soo said Malaysia is the company’s seventh international market and that Go Shop will benefit from its two decades’ experience in the segment.
This article first appeared in The Edge Financial Daily, on February 4, 2015.