Miranda Kerr on GS Home Shopping channel in South Korea

TV Viewership Is Down in South Korea, but Home Shopping Channels Continue to Thrive

Business

Australian-born supermodel Miranda Kerr has had a successful career — appearing in the Victoria’s Secret ad campaign, TV advertising spots during Super Bowl and…on a South Korean home shopping channel selling underwear.

Turn on the television in South Korea, and it seems like so many channels are dedicated to home shopping. You can order clothes, kitchenware, lazy chairs, and even vacuum-sealed bulgogi ready for cooking. Kerr’s 2017 appearance made headlines for selling out 6,000 lingerie sets in 20 minutes and making around $940,000 for the local lingerie brand she modeled for. (She was also here three years before that, in 2014.)

Miranda Kerr on GS Home Shopping in 2014

Major television networks in South Korea are losing viewership — just like their counterparts around the world. And yet home shopping channels seem to be thriving. What accounts for the difference in fortunes?

The South Korean home shopping industry grew 53.1 percent from 2012 to 2017 according to Euromonitor. Two market leaders are GS Home Shopping Inc. (19.8 percent in market share) and Hyundai Home Shopping Network Corp (19.6 percent) as of last year. However, it’s also a dog-eat-dog world due to intensifying competition and declining TV viewership — prompting the companies to get more creative.

Some of the methods involve inviting international celebrities such as Miranda Kerr, holding a preview of broadway hit musical Chicago and creating a web drama. They’ve also created their own private labels to “achieve higher margins than when distributing other manufacturers’ products,” according to Euromonitor. Companies like CJ O Shopping and Hyundai Home Shopping have launched their own cosmetic and apparel brands.

A short web drama produced by Lotte Home Shopping, about a struggling elderly farmer who goes on a home shopping channel to sell his apples (without telling his children), boosted the channel’s profile among young consumers.

The companies have also tried to diversify their revenue streams. For example, GS Home Shopping’s sales from TV reportedly accounted for less than half of its overall sales in the third quarter of last year — with the rest coming from its mobile app, online site and offline stores.

Some operators also expanded overseas, but sales have been lackluster.  

GS Home Shopping posted a net income loss of 19.8 billion won (close to $19 million) from operating in six countries (not including South Korea) in the first half of 2017. Hyundai Home Shopping lost money in China, Thailand and Vietnam.  

At least in South Korea they still reign supreme. The country’s first home shopping show was broadcast in 1995. Now, there are 17 home shopping channels, most of them placed in between big networks and popular cable channels. It means most TV viewers are bound to encounter multiple home shopping channels while looking for something to watch. (Try channel-surfing and you will see what I mean.)

“The real issue is not the number of home shopping channels but them being assigned channels with low numbers,” said Hwang Keun-byul at the Ministry of Science and ICT. In South Korea, most popular TV channels are numbered between 1 and 40 — with 14 home shopping channels sandwiched in between. “Home shopping companies prefer low-numbered channels and pay television providers fees to facilitate this. And there is no legal ground for blocking this,” Hwang said.

In 2016, South Korean television providers earned 768 billion won ($722 million) in such fee payments from home shopping channels.

 

Cover image: Screen grab of Miranda Kerr’s appearance on the GS Home Shopping channel. (Source: YouTube)

Juwon is a journalist at Korea Exposé covering all things business. She’s previously worked as a TV producer in Channel News Asia in Singapore and has interned for Bloomberg, AP and Google. Juwon is a proud owner of her dog Noah and a graduate of Journalism and Media Studies Centre at the University of Hong Kong.