Due to sluggish business conditions and increased transmission fees... GS Home Shopping faces poor performance outlook

Home Shopping Industry Faces Worsening Business Environment
Cost Increases Expected This Year Including Transmission Fees

[Asia Economy Reporter Minji Lee] Hyundai Motor Securities on the 14th lowered its target price for GS Home Shopping by 18% from the previous target of 213,000 KRW to 173,000 KRW, stating that an operating profit decline is inevitable this year due to increased expenses.

GS Home Shopping's operating profit for this year is expected to be 111.7 billion KRW, a 7% decrease compared to the previous year. Jongryul Park, a researcher at Hyundai Motor Securities, said, "Despite growth in mobile and T-commerce, considering the sluggish performance of TV shopping, internet malls, and catalogs, this year's sales are expected to be lower than initially anticipated."

The business environment for home shopping is worsening. While e-commerce centered on mobile is experiencing high growth, home shopping channels are being left behind. In the mobile sector, competition is intensifying with the emergence of social commerce companies such as Coupang, offline distribution channels like Lotte and Shinsegae, and platform operators including Naver and Kakao. On the other hand, home shopping companies are avoiding aggressive competition in the mobile sector, resulting in a significantly slower growth rate in transaction volume compared to the past.

The traditional core business, TV shopping, is competing among a total of 17 shopping channels, including the 7th home shopping channel and T-commerce channels. Researcher Jongryul Park explained, "It is difficult to achieve external growth due to a decline in viewership caused by changes in viewers' watching habits," and added, "From a cost perspective, the increase in transmission fees due to aggressive entry of IPTV subsidiaries such as SK Store within IPTV is also negative."

Operating profit on a separate basis for the first quarter of this year is expected to be 35.6 billion KRW, a 7% decrease compared to the same period last year. Transaction volume is projected to record 1.0913 trillion KRW, a 0.1% decrease during the same period. Researcher Jongryul Park emphasized, "Despite growth in the mobile sector, the external growth of other business sectors is declining, resulting in stagnation in transaction volume growth," and added, "Operating profit is expected to be sluggish due to a slight decline in gross profit margin, increased transmission fees, and the burden of selling and administrative expenses."

This content was produced with the assistance of AI translation services.