'Everyday Life of Staying Home Eating and Drinking... Will It Also Boost Home Shopping Stocks?'

[Asia Economy Reporter Ji Yeon-jin] Home shopping has made a comeback. This is thanks to the rise of 'untact consumption' as the time spent at home increased due to remote work and other factors during the COVID-19 pandemic last year. With TV viewership declining and the e-commerce market centered on mobile growing, attention is focused on whether the stock prices, which have plummeted in recent years due to concerns about slowing growth, can be revived.

According to the Financial Supervisory Service's electronic disclosure system on the 10th, GS Home Shopping's transaction volume in the fourth quarter of last year increased by 9.2% year-on-year to 1.0806 trillion KRW, and operating profit rose 57.1% to 46.2 billion KRW. During the same period, Hyundai Home Shopping's transaction volume was 1.0491 trillion KRW, and operating profit was 42.3 billion KRW, increasing by 0.8% and 13.9%, respectively. CJ ENM's O Shopping division saw its transaction volume decrease by 1.39% from 1.0156 trillion KRW in the fourth quarter of 2019 to 1.0015 trillion KRW last year, but operating profit increased by 17.46% from 41.8 billion KRW to 49.1 billion KRW. This is analyzed to be due to the favorable business environment for home shopping companies, as TV viewing increased with the normalization of so-called 'jipkok' (staying at home) life amid the resurgence of COVID-19. Although sales of high-margin products such as clothing were sluggish due to reduced outings, sales increased in most other categories.

The domestic TV home shopping market expanded with double-digit growth rates until 2013, but growth slowed significantly to around 2% in sales increase from 2014. The emergence of e-commerce markets such as online shopping malls and increased competition in the home shopping industry due to more channels worsened profitability. The rapidly increasing transmission fees paid to paid broadcasting operators as a fee for channel usage each year also became a burden.

Because of this, stock market investors also avoided home shopping stocks, causing stock prices to fall sharply. CJ ENM traded as high as 431,600 KRW in December 2014 but closed at 147,000 KRW as of the previous day. GS Home Shopping also dropped from 312,000 KRW in December 2013 to 140,400 KRW the previous day, halving in value, and Hyundai Home Shopping closed at 81,400 KRW the previous day, down from 193,500 KRW in 2014. Analyst Joo Young-hoon of Eugene Investment & Securities advised, "Since the operating situation in January appears to be continuing a similar trend to the fourth quarter, it is worth having expectations for the first quarter's performance."

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