At the start of April, TV shopping looks like being the buzzword of the month. In China's modern city Shanghai, South Korea's biggest TV home shopping company has launched a program to encourage shopping from the sofa. 
 
From this month, Shanghai residents will receive a five-hour TV shopping program every day through the movie channel of Shanghai Oriental TV. The broadcasts are the result of the newly established joint venture between Shanghai Media Group, the parent company of Oriental TV, and CJ Home Shopping of South Korea.

With a registered capital of US$20 million, the new company is 51 percent owned by SMG with CJ holding the remainder. The distribution is compatible with China's WTO commitments, which allows the relaxation of the state asset control on the media groups, while foreign investments cannot take a dominant part in the joint ventures until the end of 2005.

But policy is different from the rigors of business. It took more than a year of negotiation for the two sides to reach a consensus. The disputes were reportedly caused by differing opinions on the evaluation of the market potential. After ten years in China, TV shopping has yet to come of age, and a faith in traditional bricks-and-mortar stores has left the TV shopping plaza a deserted spot on the airwaves. In five years, the number of companies involved dropped by more than two-thirds, to 300. A recent industry report even shows the average annual income of the industry has shrunk from 20 billion yuan to 4 billion, roughly half US$1 billion. So whether this joint venture can buck the trend remains to be seen.

But the foreign investor seems ambitious over the market. It says East China, around Shanghai, has potential in the TV home shopping business because it contributed to 36 per cent of the nation's total retail sales last year, and during the initial period, which may last for months, it will begin with the promotion of popular Korean products, like electronics, beauty products and children's instruments. The company says it will follow CJ's successful logistic operations in South Korea, so that costs can be minimized. On the price of the products, of most concern to the buyers, the company says it will not go higher than those seen in the supermarkets. With its first product, a brand new digital camera, appearing on screen, the curtains for foreign TV shopping in China go up.
 
(CRI April 2, 2004)