MORE and more companies are seeing growing potential from the television (TV) home shopping business as a prospective income stream. In recent years, media groups, such as Media Prima Bhd and Astro Malaysia Holdings Bhd, have jumped on the TV home shopping bandwagon.
Both have noted that they are starting to see positive response, but none of their TV home shopping businesses are profitable as yet.
National utility group Telekom Malaysia Bhd (TM) also has a home shopping channel — Hao Xiang Shopping TV channel — on its IPTV, HyppTV.
However, unlike Media Prima and Astro, TM curently does not produce the home shopping content with a partner. Instead, TM provides the platform through HyppTV to air the home shopping channel, using content from an external provider.
“Shopping out of the traditional bricks-and-mortar shop model is picking up — be it on the web, mobile phone or on TV. Whether you are shopping online or TV home shopping, it is through a different platform, but the way the transaction is captured and how the goods and services are delivered are similar. It is all about convenience shopping,” says Charles Loh, PwC’s Southeast Asia consumer and industrial products consulting leader.
“Our study shows that there is a changing trend in retail shopping. The role of the bricks-and-mortar shops is transforming to be less transactional and more towards becoming showrooms and experiential centres, while the transactional platform is moving to digital. I don’t have actual statistics, but from my understanding of the market situation, consumers are more comfortable to make their purchases online through digital payment gateways and have the goods sent to their doorstep,” he adds.
The TV home shopping industry in Malaysia is still in its infancy, says Kim Yang Hyun, CEO of MP CJ O Shopping Sdn Bhd (CJ WOW SHOP), a joint venture between Media Prima and South Korea’s CJ O Shopping.
“We entered this space nine months ago and we are seeing active responses from the audience and customers,” Kim tells The Edge in an exclusive interview.
“The home shopping network has been tracking over 350,000 orders, with encouraging sales revenue since its launch on April 1, 2016,” he adds.
Kim says the company plans to reach breakeven in 2019 for the home shopping business. “Generally, a home shopping operation takes about three or four years to reach breakeven. We are on track.”
“From April to end-2016, we are looking at about RM60 million worth of sales,” he adds.
Revenue for Astro’s home shopping segment — Go Shop — is also growing, increasing 59% year on year for the nine months ended Oct 31, 2016 (9MFY2017) to RM200.6 million, compared with RM126.4 million a year earlier. Nevertheless, it continued to register a loss. For the same period, the home shopping segment narrowed its losses to RM12.4 million before tax, from RM17.8 million a year earlier. The number of customers increased to 690,800 (9M2017) from 428,900 (9M2016).
Go Shop was launched in January 2015 with a Malay-language channel. Astro started a Mandarin-language channel for Go Shop in October 2015 to reach a wider audience.
For the financial year ended Jan 31, 2016, Go Shop attracted 410,000 customers who bought more than 980,000 products — chalking up RM189 million in revenue. This was a noticeable jump from RM25 million in 2015.
“Furthermore, online and mobile commerce sales are growing strongly, accounting for 21% and 17% respectively of total sales, while Go Shop’s digital platforms recorded 5.5 million page views monthly,” Astro CEO Datuk Rohana Rozhan notes in its FY2016 annual report.
The annual report further said: “Our online and mobile platforms have also recorded 7.8 million total sessions. Residing in an industry that is estimated to grow to RM16 billion by 2020, we believe that Go Shop is well-positioned to be a multi-platform shopping destination, providing round-the-clock service through multiple devices.”
While the business is still not making money yet, Astro is already propelling this new business stream overseas.
It launched the Go Shop channel in Singapore — its first foreign market for the home shopping business — in November 2016 through a partnership with Singapore’s information-commupnications company StarHub Cable Vision Ltd (StarHub).
The partnership offers Go Shop — a 24/7 shopping destination on TV, online and mobile — in Mandarin to customers in Singapore.
Meanwhile, Jeremy Kung, executive vice-president of New Media at TM, says the home shopping channel on its HyppTV is part and parcel of enriching its customers’ TV viewing experience as it includes an interactive shopping session.
“TV shopping is part of our service to home-makers as well as those who do not have the luxury of time to go to shopping malls. The TV shopping channel provides convenience and options to our customers to purchase a wide variety of items including fashion wear, kitchen appliances, and household and fitness items, with special price offers for TV viewers,” he says.
“The channel [Hao Xiang Shopping TV] has been aired since April 1, 2015, as part of HyppTV’s basic channels line-up. It is available in high-definition format with English subtitles. It has avid followers with more than 200,000 viewers every month,” he adds.
HyppTV used to have an English shopping channel as well, but that has been stopped.
On its home shopping strategies moving forward, Kung says it will continue to be on the lookout for partners that are able to offer the best and widest variety of high-quality products for customers.
“We will also continue to improve and enhance the shopping experience by identifying suitable partners who are able to provide smooth and reliable shopping with safe and worry-free transactions to our customers,” he adds.
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