GS Home Shopping is expanding its stride with `mobile commerce` beyond the TV home shopping business. The mobile business is emerging as the cornerstone of the company`s growth, with the mobile portion accounting for 40% of total revenues and double-digit growth rate.

According to the distribution industry on 1-day, mobile portion accounted for 38.3% of total sales (KRW 986.6 billion) of GS Home Shopping in the second quarter. In the second quarter, mobile payments amounted to KRW 377.9 billion, up 21 % from KRW 313.2 billion in the same period last year. Mobile alone accounted for only 8.6% of mobile share in 2013, but it exceeded 30% in 2015, and 40% is now in sight. Mobile subscription fees also surged 371.8 % from KRW 278.8 billion in 2013 to KRW 1.31 trillion last year, nearing 72 % of TV sales.

TV`s portion dropped to 48.3% in the fourth quarter of last year, down from 48.5% in the second quarter. The amount of TV sales (KRW 477.7 billion) in the second quarter increased 7.3 % from KRW 446.3 billion in the same period last year. In 2013, the proportion of TVs was 60.1%, but it steadily declined to 54.6% in 2014, 52% in 2015 and 49.8% last year. In comparison, CJ Home Shopping and Hyundai Home Shopping account for more than 55% of total revenues and 23 ~ 26% of mobile share, respectively. Especially, mobile billings are leading the company`s growth, as TV billings are about three times higher than mobile billings growth.

GS Home Shopping`s mobile phone portion is larger than other home shopping companies.

The first mobile apps launched in 2009, when smartphone usage became popular, the number of downloaded apps reached 30 million, and the average number of mobile app visitors per day and total number of customers exceeded 1 million and 2 million, respectively. In the early days, the companies focused on marketing to download mobile apps through coupon payments and to make my first purchase. Since then, we have taken a strategy of attracting the Thumbs with `Merchandising power`, such as allowing consumers to purchase TV exclusive items on the mobile in order to induce continuous purchasing.

The company also focused on improving the mobile user experience (UI). It launched `chatbot` order service on KakaoTalk, and this year we launch `quick payment`, which is a simple payment method, and speed up order and payment convenience. Especially since this year, it has entered 11th Avenue and has begun to expand its services. GS Home Shopping focused on its own platform, unlike other home shopping companies that have sold in G-market and 11street. However, as competition between industries has intensified, the company has entered 11street to diversify its channels. Recently, TV commercials and live TV commercials have been shown on 11street. It is a strategy to secure young customers with frequent use of mobile as new customers and expand the standalone product line.

A representative of GS Home Shopping pointed out, "There is a merit that channel fee and production cost does not come in separately unlike TV, so it is an economic channel. Logistics and delivery service are differentiated from mobile service by brand products as they are also in other online distribution industry.”

By Park Min Yeong ironlung@


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