Oh Joy, QVC Coming to China

0 Comment

Okay yeah, I’m a little biased on this one. I never was a huge fan of these shopping shows. With the advent of the Internet and the powerful shopping tools available online, I’m frankly a bit surprised that these shows still exist. And not only are they still out there, but the market is big enough to support multiple shows. Incredible.

Given the size of that market, I guess it isn’t surprising that the shopping channel champ, QVC, would set its sights on China:

QVC said Tuesday that it has agreed to form a joint venture with China’s government-owned radio, China National Radio, to operate a retailing business in China through CNR Mall TV, a shopping television channel with an associated website.

I wish them luck. QVC has a long track record and knows what it’s doing, even in overseas markets. However, that doesn’t always translate to China, and they will certainly meet some stiff competition here. QVC’s CEO seems rather confident, but of course that’s his job:

“QVC has long recognized the great potential of having a retail presence in China,” Mike George, QVC’s president and CEO, said in a statement. “QVC’s track record of success in the United States, United Kingdom, Germany, Japan and Italy proves that our business model can thrive across many borders.”

We shall see. They’re dealing with a distribution channel of 35 million homes; that’s a nice place to start. But can this model survive long-term against the Internet, particularly as new mobile services become available? I’m decidedly skeptical.

But I can’t leave this without taking a look at this joint venture. Occupational hazard. We know that this is a broadcast media enterprise, so we’re dealing with some pretty heavy regulatory issues. The question you might have concerns whether QVC, in the form of this joint venture, is actually going to hold equity in an enterprise that has a broadcast license. Ha ha ha.

Nothing doing. Sounds to me like this JV will be providing services/licensing or otherwise working with the broadcast unit. Moreover, QVC will not even have a controlling interest in the JV. Their equity will be limited to a “safe” 49%. The broadcast unit will, unsurprisingly, continue to be wholly owned by the government.

You know, the more I look at this thing, the more it looks like an old-fashioned Sino-foreign joint venture. Think about it, you’ve got the foreign company providing products and expertise (in this case, a business model and maybe some content), and the Chinese party comes to the table with a  pre-existing distribution network.

The more things change, the more they stay the same.

3 responses on “Oh Joy, QVC Coming to China

  1. D

    Chinese shopping on TV already arrived 15-20 years ago, no? I think guru David Wolf from http://www.siliconhutong.com ran one of those companies many years ago in China. And Nasdaq-listed Acorn also did/does that in China. Lots of competition already on the provincial channels for QVC. And as you already said, lots of competition in China, period. Distribution channels will make or break them, and I guess most of their on-air stuff is made in China already, no?

  2. 阿江

    QVC doesn’t need to match the internet. With the TV-watching population of China, they only need to get enough of an audience to push their products. Then of course, all QVC needs to do, is push a defective product to ruin themselves. Or after several defective products, their legal and PR departments would become so bloated, that it wouldn’t be cost-effective to run in China.
    Or maybe QVC will survive like cockroaches?