‘So beautiful, so elegant, looking like a wow’, a rather popular short on Instagram features Jasmin Kaur, who often uses her account to sell ethnic wear. Had it been a few years back, one could have seen a similar attempt being made by hosts on TV channels to sell an array of items including blenders, bedsheets, and home decor, among others. There was a time when India saw a rise in the number of home-shopping channels right TVC Sky Shopping to HomeShop18, and Naaptol, among others. However, with the rise of e-commerce and other social platforms, such personalised selling experiences have moved online. “Home-shopping channels were the innovators of television shopping content. Back then, these channels set the tone for a unique way of shopping in India (i.e., purchasing from home). They paced it out well, but in my view, the state of operations at that time in India led to its slow failure. They had a decent ride on linear TV till it lasted but failed to focus on the consumer experience after the sale and the returning consumers may have dwindled due to this. Also, the products that were being sold on these channels were already available in Mom-and-Pop stores,” Vinita Shah, a senior media and sports analyst, said.
According to a report by ResearchAndMarkets.com, the Indian home-shopping market is expected to grow at a 13% compound annual growth rate (CAGR) from 2017 to 2023. As for international markets, the concept of home shopping channels which also run its e-commerce site is currently restricted to markets such as Germany, and South Korea, among others.
Market – here and outside!
Home shopping channels have existed for a long time in markets like the US and the UK. It was in 2000, that India too was introduced to the concept of home shopping channels. Since then the market has flooded with a clutch of channels.
The home-shopping channels started off by selling products which were rather difficult to distribute through conventional retail. But in no time, backed by the expansion of product categories these home-shopping channels began to compete against conventional retail stores. “With smartphone proliferation and cheap data consumer viewing habits have changed significantly. Consumers are spending more and more time on their smartphones and less and less time on linear TV. Even TV is being watched with a smartphone on hand leading to less focus on TV. Some consumers have also stopped watching linear TV completely and moved to connected TV. With linear TV being watched less from home shopping channels have gone down leading to a decline,” Manu Agarwal, CEO, Naaptol, said.
Even as TV remains the choice to watch content for a large part of the audience base, it is largely the rise of e-commerce companies and direct-to-consumer (D2C) brands, which added to the woes of the home-shopping channels. According to a report by KPMG, the D2C market in India is worth $12 billion in 2022. The industry is expected to grow at a compound annual growth rate of 40% to reach $60 billion. According to a survey by Rakuten Insight on online shopping behaviour in India conducted in June 2022, 76% of consumers used e-commerce marketplaces to shop online. In comparison, only 36% of consumers used shopping apps.
Interestingly, markets like the US, South Korea and Germany still have seen the survival of these channels despite the growth of e-commerce. In 2020, there were 94 speciality channels on German television, an increase of 49 channels compared to ten years before, as per findings by market research firm Statista. In fact, in the US QVC still holds popular ground among consumers. When it comes to fashion online shop users, brand awareness of QVC is at 55% in the United States, as per a recent Statista report. All in all, 8% of fashion online shop users in the United States use QVC. That means, of the 55% who know the brand, 15% use them. “QVC, as the best and biggest industry example, is now a $14 billion company with one-third of its sales via live TV shopping generated from international operations. Streaming and mobile access have expanded access and in some cases revenues. Over half of the sales are digital and over half of those sales are from the mobile phone and tablets. Those who just watch QVC on TV are valued at an average of $1,247 (USA) purchasing 24 ($52 per) items annually and those who watch across multiple platforms are worth about $3,400 per annum,” Budd Margolis, visual marketing and e-commerce expert, wrote in his one his columns, adding that the industry measures performance on a $PM or dollar per-minute basis. Live and instant metrics provide the ability to control exposure and maximise sales efficiency.
End of the story?
To be sure, the emergence of influencers and social media has contributed to the slowdown of the home-shopping channels in India. According to experts, influencer marketing is a fragmentation of home-shopping channels. “A lot of influencers are promoting products with their discount codes. In a sense, there has been a fragmentation of the home-shopping channels into 1,000s of very specialised home-shopping influencers unlike the horizontally diverse home-shopping channel offering multiple product categories and multiple products, it has been vertically cut,” Paritosh Joshi, a senior media analyst, said.
Interestingly, the existing home-shopping channels have joined the social media bandwagon. According to Agarwal, platforms like Naaptol are using digital media including Instagram to promote curated products via video ads, addressing the changing media consumption habits of consumers and helping win lost consumers from TV.
E-commerce has been a formidable foe to the existence of home-shopping channels as the websites provide consumers with sharper prices and wider selection. While home-shopping channels introduced new products to consumers, the conversion would happen on e-commerce platforms due to better pricing of products along with more options. What’s more e-commerce companies such as Amazon and Flipkart, over the years have built a strong logistics and supply chain system, while home-shopping channels in India, failed to do the same. Only six percent of respondents preferred shopping from home-shopping channels as compared to online shopping (73%) during the festive period in 2021, as per a LitmusWorld report.
Moreover, as the popularity of e-commerce platforms rose, industry experts opine that sellers too switched sides so that they do not miss out on the target audience. “Online retail takes away the attractiveness of home-shopping channels by providing a better price-to-performance ratio. The reach of the e-commerce platforms is better as well as the volume of products is much higher as compared to home-shopping channels,” Joshi, added.
Even as home-shopping channels still exist in some form, a majority of players have gone online “Teleshopping channels will not die as it has switched from traditional media to digital media. These channels solve an important aspect of consumers in terms of the discovery of new and innovative products,” added Agarwal.