AgTalk | India is still a nascent market for home shopping: Star CJ's Kenny Shin

Online shopping and shopping on television is all set for good times ahead with retailers of all types expanding product offerings, adding in-store pickup, free shipping and other salient services. One of the leading players in this segment is Star CJ Alive which has benefitted immensely from the growing trend. It has witnessed exponential growth and its customer’s base has tripled from one million in January 2012 to almost three million today. On its part, Star CJ Alive with its expansion plans has ensured to provide the viewers unparalleled service and convenience of shopping from the comfort of their homes. With its eclectic and appealing array of around 300 select, premium branded products; the channel reaches out to viewers in over 50 cities.

Star CJ Alive recently appointed Kenny Shin, as the New CEO of STAR CJ Network India Pvt. Ltd. An experienced professional, Shin joined CJO Shopping, Korea in the year 2002 and has progressed through leadership roles. To his credit, through his leadership he has ensured that the company grows impressively and reaches its peak.

An MBA from the University of Rochester, Shin’s in his current role as the CEO of STAR CJ India is responsible for the company’s growth and expansion plans. He brings with him over 26 years of strategic and expertise across the home shopping sector. His career graph also includes stints with many reputed Korean companies like Dong-Suh Research Institute, Hansol M.com and HansoliGlobe in addition to the Rochester based Eastman Kodak Company. 

Adgully spoke with Kenny Shin to find out more about his plans for the Indian online shopping and television market. The following are the excerpts of the interview.

Adgully: Please throw some light on Star CJ’s journey so far, its beginnings and the important milestones till date?

Kenny Shin: STAR TV is a part of News Corporation ('NewsCorp'), one of the world's largest media and entertainment conglomerates with operations spanning in the US, Continental Europe, UK, Australia, Asia and the Pacific Basin. NewsCorp operates in various segments of the media industry across five continents and holds leadership positions in most of them.
CJ O Shopping Co. Ltd. is one of the most trusted names when it comes to home shopping in Korea. CJ O Shopping has been ranked no.1 in both, the 'National Customer Satisfaction Index in the TV home shopping network' list (2002 -2008) and the 'Korea Brand Power Index in home shopping' list (2005-2008). With success in each market it has entered, its revenue amounted to a staggering $ 3.2 Billion in 2011. CJ O Shopping is an affiliate of CJ Group which was established in August 1953 as part of Samsung's first manufacturing operations. It is also the No. 1 home shopping company in Shanghai, China.

CJO Shopping Co. Ltd. has expanded to many countries -.China, Japan, Thailand, Vietnam, Turkey and now in India. STAR CJ Network India Pvt. Ltd. (STAR CJ) is a joint venture between STAR Asia and the South Korean home shopping major, CJ O Shopping Co. Ltd. Backed by the creative insights of STAR and the domain leadership of CJO Shopping, STAR CJ launched a 24x7 home shopping channel called STAR CJ alive to further increase its outreach to viewers and to provide the viewers unparalleled service and the convenience of shopping from the comfort of their homes.

STAR CJ alive first arrived on the home shopping scene in India as a 6-hour slot on STAR Utsav on September 2009 and 1st August 2010 saw the launch of STAR CJ Alive in its 24-hour avatar.  From 1 million customers in January 2012 to almost 3 million customers today, in Dec 2012,  Star CJ Alive, one of India’s leading 24x7 home shopping channels has changed the way people shop.

Star CJ Alive with its expansion plans has ensured that today it provides the viewers unparalleled service and convenience of shopping from the comfort of their homes. With its eclectic and appealing array of around 300 select, premium branded products; the channel reaches out to viewers in over 50 cities across India. It can therefore be stated that Star CJ alive is now one of India’s fastest growing home shopping channel, offering a variety of products ranging from fashion, lifestyle, home appliances, kitchenware, digital devices, jewellery, beauty products etc.

AG: How has the Indian market for online shopping & Television evolved over time?

KS: The market and Indians have come a long way from their early days of shopping at mom and pop stores. Indians spent about Rs 31,500-odd crore buying goods and services using the net in 2010, according to the Internet and Mobile Association of India (IAMAI). Television reaches more than 600 million Indians, while the net reaches only 83 million, which clearly indicates that television channels have a huge potential market. Also, a fair  number of savvy online users are also making big ticket  purchases in the digital space also. In fact even when we have programmes featuring  electronics products, a substantial  number  of consumers order for them.

I would say that, in the next few years, the number of Indian consumers who will shop on the internet will go up drastically, as internet and credit penetration increases. Also there will be the rub-off effect from consumers who have bought already online and on TV. As for TV shopping, judging by the way it is doing at STAR CJ, I see a decent growth – at least an initial growth  40  per cent year-on-year, at least in the initial years

AG: What do the future trends indicate?

KS: I see a shift from the traditional shopping to online space….all due to ‘time poverty’…..confidence in the format and greater logistics support. Major sales will be coming from Tier II and Tier III cities while metros will continue to support steadily. Home shopping in the TV space will experiment with a whole lot of non-traditional products too - may even sell products and services like cars,  insurance and DTH services among other products which are routinely sold in countries where TV home is far more developed.

AG: How important is India as a market for the company. Which are the other markets that you are present in? How do they fare?

KS: As the Indian economy continues to grow; India is a very important market for us. It is known for its diversity and the scope of expanding in India is huge. There is hardly any development of retail spaces in most housing projects. Most private colonies offer golf courses and swimming pools but not shopping areas. Therefore, there is a distortion in the prices of retail spaces in malls, where rents are very high. Now add ‘time poverty’ — read that as stressed out lives with very little time to go shopping. So the whole phenomenon of ‘anytime, anywhere shopping’ is waiting to take off.

CJ O Shopping is present in a number of markets -.Korea, Japan, China, Thailand, Vietnam.  We are doing very well in these places and have grown tremendously. We have just opened one more joint venture home shopping in Turkey on Dec. 5 this year. 

AG: What are your growth & expansion plans going forward?

KS: Well, initially we started operations with the west and the north and from there we expanded to the south and then the east…so today   we deliver pan-India. We plan to add more products, across categories, across price points, ultimately increasing the choice that we make available to consumers and make Star CJ products available at every pin code that India has!    That is my final goal for India.

You know DongPang CJ which operates just out of Shanghai city, which is one of our Chinese brother companies, would achieve $1 billion business this year within eight years of home shopping operation. So if you try and think what STAR CJ – which is operating in India – and India is a huge huge country – we should achieve $1 billion sales within next five years like Dongfang CJ hopefully.

AG: What are the challenges and main concerns that you presently face in the business & how are you tackling them?

KS: India is a vast country with a lot of diversity in language, cultural sensibilities and psychographic factors which change every 100 kms. Thus catering to the needs of such a diverse country itself is a big challenge. One of the big hurdles this industry is facing today is fragmented back-end. There is a serious need to create a better structure for payments and logistical infrastructure. Currently, inter-state movements of products also pose a problem, given the different taxation rates. Indian consumers are still skeptical about online payment methods, or have concerns about security, thus most consumers opt for cash-on-delivery, which can be hard for businesses as it holds up the cash flow within the system due to multiple layers involved in the process.

AG: How is the competition and your strategy to manage the same?

KS: India is still a nascent market in terms of home shopping. Just two players (24hours X 365days) in the same market should not be called competition. We are more of players who are establishing the ‘’home shopping” market together. Thus we are currently focusing more on strengthening our presence and increasing our footprints.

AG: As the new CEO what is your immediate priority?

KS: Well, increase the footprint as much as possible and increase the exclusive product range so that Star CJ provides exclusive products within reasonable prices. In conclusion, I would like to differentiate our product and service from ordinary product in off-line business.

AG: How do you plan to steer the business ahead?

KS: Well, products are the mainstay of this business, so there is a constant experimentation with the product portfolio. Along with establishing our own private labels under our brand umbrella, we have launched 3 private label products already and more are on the anvil. I have also been looking at all the other facets that are crucial to the home shopping format, so we are on the track, let’s see now.

AG: How do you find the Indian market as compared to the Korean market where you had a long stint?

KS: Indian consumers are hesitant to make online purchases compared to Korean consumers. In Korea, 10 per cent purchase is made after every episode while in India 40 per cent is done post the episodes. Indian consumers are more price sensitive compared to Korean consumers hence we try to pamper them with discount offers and gifts. Indian consumers don’t splurge a lot on FMCG products and so the consumption level of FMCG products are not that encouraging.