Thursday 28 Mar 2024
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This article first appeared in The Edge Malaysia Weekly, on February 6 - 12, 2017.

 

MEDIA Prima Bhd’s MP CJ O Shopping Sdn Bhd (CJ WOW SHOP) is considering replacing its time slot model with a 100% dedicated channel model, says the home shopping business’ CEO Kim Yang Hyun.

“We are doing our research on that business model. Today, we are only operating 16.5 hours a day — in the morning and afternoon as well as three hours in middle of the night to early morning. In total, we have about 19.5 hours that are broken up into all four stations — TV3, ntv7, TV9 and 8TV. However, prime time is not included,” says Kim. “So, if we do go into the 100% dedicated channel model, we will get an extra five hours and get prime time slots on one specific channel.”

Kim believes the home shopping business is able to create a non-traditional revenue stream for the Media Prima group. CJ WOW SHOP is a joint venture between Media Prima and CJ O Shopping, South Korea’s first broadcasting station for home shopping and a subsidiary of conglomerate CJ Corp.

“The potential for home shopping is big here. Let me put things into perspective for you. In South Korea, the home shopping market is about US$10 billion. In Malaysia, the total retail market was US$90 billion in 2015, and out of that, only US$1.5 billion was from e-commerce, according to research reports. There is still room to grow and that is why CJ Group tied up with Media Prima for this business. Malaysia is the 11th global market for the CJ Group,” he says.

“Through our partnership here, we are able to reach seven million TV households. That is our added advantage and we can provide a new shopping experience to rural people,” Kim adds.

He shares that a majority of CJ WOW SHOP’s customers (65%) come from outside the Klang Valley. About 85% of sales comes from TV, 7% from web and the rest from mobile.

“In general, home shopping represents convenient and comfortable shopping. With retail consumer sentiment low and disposable income shrinking, more and more shoppers are looking for cost-friendly and reliable products … and home shopping can provide that. Our products are focused on being family and cost-friendly. The average selling price is not more than RM200,” says Kim.

“We are operating roughly 200 stock keeping units (SKUs) and this year, we expect to have more than 500 SKUs to provide our customers with variety,” he adds.

Kim says at the beginning, a majority of the products were Korean but the company has been getting more local products. “At present, we have about 60% local products and 40% foreign ones, mainly from South Korea. We also have products from China and Japan. All in all, we have engaged about 60 suppliers and they range from SMEs (small and medium enterprises) to big names such as DKNY and Samsung.”

“As Malaysians get more familiar with home shopping, we plan to expand our product range beyond the traditional items such as kitchenware and electrical goods to more personalised and customised products,” he explains.

Kim shares that margins are good but declines to reveal numbers.

The nine-month-old home shopping business is still not profitable but Kim believes it will break even by 2019.

Having started with a Malay channel, CJ WOW SHOP launched its Mandarin programme on Jan 9.

According to Media Prima’s results for the nine months ended Sept 30, 2016, its home shopping revenue helped to offset the lower advertising revenue from its TV business. The group also notes that CJ WOW SHOP home shopping is “showing progress while still in its gestation period”.

 

 

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