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Shop till you drop, all at home

By Aabhas Sharma & Upasana Kaur in New Delhi/Mumbai
August 31, 2009 12:03 IST
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ShoppingLeisurely surfing TV, Neha Kulkarni, a housewife in Mumbai, once spotted a set of veggie choppers she was yearning for on a home shopping channel. Instead of ordering it over the phone or sending a message, she chose to visit the channel's retail outlet to buy the product.

While shopping on TV has been available for years now, a majority of Indian shoppers still prefer to touch and feel before buying a product.

Despite this, major TV channels are now focussing more on the home shopping segment.

Network18 launched a 24-hour channel offering Home Shop18 last year and soon saw its reach almost double. Now, Star TV along with a Korean home shopping group is planning to launch a 24-hour home shopping channel.

The reasons behind this increased focus on home shopping are compelling. According to Ernst & Young, a professional services organisation, home shopping in India -- which includes e-commerce, catalogue shopping and tele-shopping - is a nearly $2.5-billion (around Rs 120,00 crore) industry, growing at 35 per cent annually.

What is more, it is expected to become a $10-billion industry in the next four years. Market experts claim that the home shopping segment alone should be in the region of Rs 300 crore (Rs 3 billion).

Moreover, channels do not have to do much as home shopping companies buy time slots, ranging from two minutes to an hour, and air infomercials/product presentations, explaining the product's utility, price, product code and call-centre numbers.

"Home shopping programmers use the unsold inventory on a channel and make money. Channels, in return, get revenue, though it accounts for a mere 2 per cent of their total revenue," said Maneesh Mathur, chief operating officer of P9 Integrated, a film entertainment marketing company.

Over the last two years, the duration of tele-shopping programmes has increased. Data compiled by television audience measurement's media research showed that home shopping accounted for 28 per cent of the total programming on general entertainment channels in 2007-2008, and it went up to 57 per cent in 2008-2009.

Take, for instance, Home Shop18. It reaches about 6 million cable and satellite homes and makes transactions worth Rs 20 crore per month. It now gains at least one new customer every minute, according to Home Shop18 chief executive officer Sundeep Malhotra.

Home Shop18 has also seen a jump in its viewership from 7.49 per cent in May-July 2008 to 16.55 per cent in May-July 2009. Even on popular GECs like Zee, STAR, Colors and Sony, programmes based on home shopping have an average viewership of 20 million.

Zee TV's home shopping-based programme TVC (Trust Value Commitment) has a viewership of 17 million. Colors with Home Shop18 has a viewership of 29 million and Sony Entertainment with Telebrands has a reach of 19 million.

However, cut to the scenario a decade ago, tele-shopping, the predecessor of home shopping channels that began in the 1990s, did not meet with success due to factors ranging from low TV penetration, lack of awareness, odd timings and expensive TV slots.

UTV had to merge its tele-shopping arm Tele Shopping Network with itself in 1992 after initial losses. Timings are still odd, but with the change in the work culture, people are preferring such options.

So what has changed now? "People are starting to realise the benefits of the most convenient form of shopping," said Malhotra.

The convenience part is also the challenge. "Other than convincing people that home shopping is convenient, making them believe that here the product range is better than outside and items are value for money is another challenge. I think the STAR brand equity will help in making believe that it is something which can be trusted on," said Paritosh Joshi, CEO, Star CJ Networks.

"There is a lot of scope for innovation in the space and consumers too will realise this once they have an outlet to access," Joshi added.

His views are shared by Malhotra. "Just because of a few tele-brands, the image of home shopping has been tarnished. But we are slowly overcoming that," Malhotra said, adding that Home Shop18 made a conscious effort not to associate with products that were shown on tele-branding programmes.

Palal Bhattacharjee, associate director (client solutions) of AC Nielsen, is of the view that the home shopping space is still at a nascent stage, but it is something people are willing to experiment with. "Shopping and television are two things most Indians spend their leisure time on. So the potential for home shopping is massive," he said.

Joshi is of the view that if right products are provided through right distribution channels, the touch-and-feel factor can be overcome. "Who doesn't want convenience? Home shopping is all about that," he said.

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Aabhas Sharma & Upasana Kaur in New Delhi/Mumbai
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