CJ to open ad studio in Vietnam

An online influencer films at Korea’s DADA Studio in southern Seoul. [CJ O SHOPPING]

Entertainment company CJ E&M and the television home shopping channel CJ O Shopping will launch a large-scale “video commerce” studio in Ho Chi Minh City, Vietnam, this July.

Named DADA Studio Vietnam, the site will include filming studios and offices where social network influencers and producers can make commercial videos. It is the first major global project announced by both companies, which plan to merge into one corporation, CJ ENM, in July.

Video commerce, also known as V commerce, refers to short advertising videos that appear on social media like Facebook, Instagram and YouTube. They deliver product information or usage tips and frequently show online influencers recommending the product.

In Korea, such advertising tactics have already proved to be effective, particular when targeted at younger generations that tend to use smartphones more than televisions. For brands, it is a way to promote products without having to foot the hefty bill that comes from conventional advertising channels.

Even before the merger announcement, CJ O Shopping and CJ E&M have both conducted projects related to online influencers for years now, but neither company has really developed that connection into a profitable business model.

CJ E&M offered services and organizing meet-ups for online influencers through an internal unit called DIA TV. It has worked with over 1,400 teams of online influencers since 2013, including those from overseas.

CJ O Shopping, which has been developing online revenue sources for the last few years, already has experience running the DADA Studio in Korea. Launched in March last year, it now produces more than 200 video product reviews per month that appear on social media networks in six countries, and has more than nine million subscribers worldwide.

After construction finishes in early July, the Vietnam studio will be able to make 1,000 commercial videos a month, according to the home shopping channel. The main source of revenue will be advertising fees earned from producing commercial ads for brands.

CJ hopes that the Vietnam center will create new business opportunities in Southeast Asia, taking advantage of the region’s interest in Korean culture and beauty.

“Vietnam is familiar with Hallyu (Korean wave of pop culture), has a high smartphone usage rate and a large pool of well-educated young people who we believe will be capable of making good-quality content,” the company said.

It added that Vietnam is a growing economy that is seeing increased interest from global brands. CJ hopes to be the local partner for international companies seeking help with video commerce and online marketing.

Part of the business plan for Vietnam is developing retail channels so that online video ads can directly lead consumers to links for purchases.

“The global V commerce market is growing with rapid speed and we plan to grab the helm by merging the two companies’ capacity in digital content and online channels,” said Kim Do-han, a senior executive at CJ O Shopping in charge of the future growth division.

BY SONG KYOUNG-SON [song.kyoungson@joongang.co.kr]