As part of a renewed bid to revamp and establish its television home shopping business, Asian Sky Shop Ltd, the Essel Group plans to launch a dedicated 24x7 channel for the service. An executive at the company who did not wish to be identified said the channel would be on air within a year.
Rising media costs have prompted India’s home shopping networks to scale back their on-air advertising. Television advertising plays a crucial role in their business model; India has about 105 million television households. Asian Sky Shop, one of the country’s oldest shopping networks, currently advertises for up to 10-12 hours a day on some channels. The Zee Group, which runs over a dozen channels, is also part of the Essel Group, but Asian Sky Shop’s ads aren’t restricted to it.
By some estimates, the market for home shopping networks is around Rs250-300 crore. The products usually sold include kitchenware, health and fitness-related products, household electronics and jewellery. Asian Sky Shop expects to close 2007-08 with Rs75 crore in revenue.
“The (new) channel will be supported by a strong marketing push emphasizing the brand, a first for an Indian shopping network,” said Bimal Selarka, CEO and managing director, Asian Sky Shop.
Asian Sky Shop also plans to expand its network of franchised outlets that stock and sell products advertised on TV. It is, reportedly, in the final stages of negotiations with Big Bazaar, the retail chain run by Pantaloon Retail (India) Ltd, to sell a line of kitchen and fitness products. An executive at Big Bazaar, who did not want to be named, confirmed that talks were on, but declined to provide any more information.
The television channel Asian Sky Shop plans to launch will solve one problem faced by it. A typical product promotion lasts five minutes and the company purchases half-hour-long slots but advertising, especially on mainstream channels, is an expensive proposition. Even slots bought on the Zee network are only slightly less expensive. They did not provide details on actual costs. A 10-second commercial ontelevision could cost anywhere up to Rs3.5 lakh depending on the time of day and the reach of the channel, but it is likely that advertisers buying half-hour slots get a substantial discount.
Home shopping networks have traditionally sold their goods on television and through franchised outlets. The products on sale are rarely known brands. Shopping networks buy products in bulk from a variety of international manufacturers. Asian Sky Shop sources products from Hong Kong’s JB Group, which employs 650 designers to come up with what Selarka terms “novelty products”.
“In our field, we have to constantly come up with new products, new features and new bargains,” said Selarka. “We have to sell novelty products.” Branded products don’t work, he added, because “if the product is available next door, why would people buy the product from us?”