TV shoppers turn to Internet offers

Television shopping channels suffered their first-ever sales drop during the first quarter, while major Internet retailers saw sharply rising revenues ― a reversal of fortune for both newly emerged distribution channels. According to the television shopping industry yesterday, LG Home Shopping Inc. saw an estimated 10 percent fall in sales year-on-year in the first quarter, while CJ Home Shopping Co.’s first-quarter revenues fell about 2.5 percent. LG Home Shopping recorded 305.3 billion won ($250 million) in sales during the first three months of last year, while CJ Home Shopping earned 251.1 billion won in the same period. The two retailers command a combined 70 percent of the Korean television sales market. The estimates were a huge contrast to previous earnings figures, as television shopping channels had approximately doubled every year since they were launched in 1995. Industry analysts said the declining sales by LG Home Shopping and CJ Home Shoppng were due to the already saturated cable television market and slowed domestic consumption. Conversely, the two firms’ online shopping malls experienced double-digit sales growth in the first quarter over the same period last year. LG eshop sold 97 billion won of goods online in the first quarter, a 70 percent year-on-year increase and a 20 percent rise from the fourth quarter of last year. CJ Mall, meanwhile, posted 59.6 billion won in first-quarter sales, a 432 percent jump year-on-year and a 14 percent increase from the previous quarter. Hyundai Home Shopping’s Internet mall, Hmall, sold 30.7 billion won of products online, up 233 percent year-on-year and 60 percent from the previous quarter. Interpark, another Internet mall, saw sales jump 80.4 percent in the first quarter over the year before to 77 billion won. The Internet portal Daum Communication Corp. registered 6.02 billion won in sales during the first quarter ― double last year’s first-quarter sales and up 12 percent from the fourth quarter. Booming Internet sales were attributed to the rapidly rising number of online shoppers. With lower overheads than traditional retailers, Internet malls often have more competitive prices. The number of local online shoppers totaled 2.3 million in 2000, 7.8 million in 2002, and is expected to reach 13.1 million by 2005. by Lee Young-lyoul