'20 Trillion Market' Home Shopping Lowers VIP Threshold

CJ ENM O Shopping & NS Home Shopping Revamp on April 1
Simplified VIP Tier System...Shorter Selection Cycle
Expanded Unified Membership Combining TV, Online, Mobile
Focus on Online & Mobile Growth

Photo by CJ ENM O Shopping

[Asia Economy Reporter Cha Min-young] The battle to secure loyal customers is fierce within the home shopping market, which has grown to an annual scale of 20 trillion won. While lowering the entry threshold for top-tier customers (VIPs) who receive monthly discount coupons, exclusive events, and various reward benefits, the system is evolving into an integrated membership form that covers TV, online, and mobile platforms.

According to the home shopping industry on the 27th, CJ ENM O Shopping will shorten the VIP selection cycle from three months to one month starting next month on the 1st. This means the VIP entry door will open every month. The performance criteria will remain the same, based on the previous six months. The highest tier, previously Platinum R, will be merged into the Platinum tier, reducing the membership grade system from five levels to four. The 5% instant discount, previously exclusive to VIP tiers, will also be extended to the Gold tier.

NS Home Shopping is reorganizing to integrate purchase performance across various channels such as TV home shopping, T-commerce, online, and mobile, as the boundaries between TV home shopping and online malls disappear. Additionally, the grade system will be reduced from seven levels to five. The purchase performance criteria will change from three months to six months. Home shopping companies are steadily lowering the VIP threshold and enhancing customer convenience through integrated memberships across affiliates, expanding synergy within their groups. For example, GS Shop reduced its membership grades from five in 2018 to three. Hyundai Home Shopping integrated its previously separate VIP grade systems, Top Class and Hmall membership, as of July last year. The Top Class selection cycle was also shortened from one year to six months.

Last year, the total transaction volume of TV home shopping is estimated to have comfortably surpassed 20 trillion won for the first time since the home shopping market's inception. The total transaction volume, covering TV, online, and T-commerce, grew continuously for five years from 15.1907 trillion won in 2014 to 19.6375 trillion won in 2018. Although the broadcast transaction growth rate slowed to 0.9% year-on-year in 2018, the mobile transaction volume grew by 16.7% during the same period, maintaining an overall upward growth trend.

An NS Home Shopping official said, "Through the membership reorganization, we expect to broaden customer choices and enable various company channels to create synergy." Another home shopping industry insider noted, "Unlike department stores that strengthen VVVIP memberships targeting the highest-tier customers, home shopping targets mid-tier customers with lower price thresholds, so attracting mid-level demand is important, leading to a completely different strategy. Also, since the home shopping market is growing centered on online and mobile, we expect effects from new customer inflows."