GS Home Shopping Q3 Separate Operating Profit Up 94.3% Year-on-Year

Longest Summer Monsoon and COVID-19 Boom
Sales Up, SG&A Expenses Down

[Asia Economy Reporter Minyoung Cha] GS Home Shopping recorded high operating profits in the third quarter, benefiting from cost reduction effects amid the special demand caused by the prolonged rainy season.

GS Home Shopping (GS Shop) announced on the 28th that its transaction amount in the third quarter of this year increased by 10.2% year-on-year to 1.089 trillion KRW. During the same period, sales based on separate financial statements rose by 2.3% to 286.8 billion KRW, and operating profit surged by 94.3% to 38.3 billion KRW. Net profit for the period also increased by 28.5% year-on-year to 29.9 billion KRW.

The growth in transaction amount was driven by factors such as the increase in online shopping due to social distancing, the extended rainy season, and the Chuseok holiday, which typically slows sales but falls in the fourth quarter. The rise in the proportion of health food products and a decrease in selling and administrative expenses ratio (-0.9 percentage points) were reflected in the operating profit.

In particular, mobile shopping led the overall transaction amount, growing 15.7% year-on-year to 629.2 billion KRW. The share of mobile shopping in total transaction amount reached 57.8%. During the same period, TV shopping recorded 360 billion KRW, and internet shopping (PC) accounted for 78.9 billion KRW. GS Home Shopping quickly shifted its business capabilities to the mobile market based on data in response to changes in customer and shopping trends, securing competitiveness mainly through exclusive products. GS Home Shopping’s mobile shopping app recorded 38 million downloads excluding duplicates.

By product category, the proportion of clothing and beauty products decreased due to the impact of COVID-19, but the shares of food and daily necessities increased by 6 percentage points and 5 percentage points respectively, supporting the performance.

GS Home Shopping stated, "We have continued profitability-focused management based on expanding loyal customers through cross-channel strategies and securing future growth engines." It added, "Amid increasingly fierce competition in the shopping environment, we plan to identify customer needs based on big data, discover new commerce opportunities through participation in the venture ecosystem, and cultivate future growth engines."