Korea's CJ Corp widens regional reach
Launch of JV channel with GMM Grammy in June
The home-shopping service and entertainment-content distribution subsidiaries of South Korea’s largest conglomerate, CJ Corp, are keen on expanding within Southeast Asia over the next five years to cash in on increasing growth in television-based home shopping in the 600-million-strong regional market.
Lee Hae-sun, chief executive officer at CJ O Shopping, a global online marketing and merchandising company and home-shopping service, said the company would first launch its O Shopping TV channel in a joint venture with Thailand’s leading entertainment company, GMM Grammy, on June 18.
The JV is the company’s second operation in Southeast Asia, after Vietnam.
Meanwhile, CJ O Shopping is preparing to make an announcement about a new joint venture in Turkey for home-shopping business.
“After Thailand, we are seeking the establishment of new JVs with leading media and entertainment companies in Southeast Asia, namely the Philippines, Indonesia, Malaysia and Singapore, to set up home-shopping businesses for overseas growth,” said Lee.
This forms part of an aggressive expansion aimed at cashing in on rising home-shopping demand in the region, which is expected to boost overseas sales to 65 per cent of revenue in the next five years, from 35 per cent now. CJ O Shopping’s overall earnings last year were about US$3 billion (Bt93 billion).
The company currently runs home-shopping businesses in Asia through Star CJ in India, SCJ in Vietnam, CJ Prime in Japan, and in China through Dongbang CJ in Shanghai, TianTian CJ in Tianjin and Nambang CJ in Guangzhou. It also has similar operations in the US, Mexico and Europe.
Lee expects the new business in Thailand to break even within five years of Bt540 million worth of investment on 430-square-metre TV studios, call centres, payment and logistics services for the O Shopping TV channel.
“We hope to change Thai consumers’ shopping behaviour, as in South Korea. With the improvement of information technology infrastructure and growing cable-TV viewership, the home-shopping market here [South Korea] has grown significantly, which accounts for 26 per cent of sales in retail markets,” he added.
Meanwhile, global business director Sung Nak-je, who is also chief executive of G CJ O Shopping in Thailand, said the company had to focus on building trust among local consumers over the next couple of years.
In the first phase, the O Shopping TV channel will offer 35 to 40 electronic devices and cosmetics products from both global and South Korean brands.
To merchandise at least 100 new products to Thai customers each year, CJ O has also established CJ IMC. Additionally, the company uses CJ’s affiliate GJ GLS for delivery service in Greater Bangkok and has Thailand Post for the rest of the country.
Sung said the company would introduce an Internet mall next year to tap into new-generation customers.
Meanwhile, CJ E&M, the South Korean conglomerate’s entertainment and media unit, is in discussion with leading entertainment and media firms and cable-TV operators in Southeast Asian countries to set up businesses through which it can export its entertainment content and related products.
Hwang Jea-sang, managing director and entertainment vice president for media international at CJ E&M, said the company had witnessed positive growth in cable-TV business in the region, particularly in Thailand and Malaysia, where annual growth runs at between 10 and 20 per cent.
CJ E&M is responsible for distribution of finished Korean entertainment content, including TV programmes, movies, online games and cinema technology. The company also operates 18 cable-TV channels and provides Internet service in South Korea.
CJ Corp is a global lifestyle company, focusing on four key businesses: food and beverage services; home shopping and logistics; entertainment and media; and bio-pharmaceuticals.
