[Asia Economy Reporter Seulgina Cho] Last year, the average product sales commission rate of seven domestic TV home shopping companies was found to be 28.7%. The average sales commission rate for small and medium-sized enterprise (SME) products was 30.1%, with CJ ENM having the highest rate among the companies.
The Ministry of Science and ICT announced on the 25th that, according to the 2020 statistics on sales commission rates of seven TV home shopping companies, the average sales commission rate was 30.1% for SME products and 28.7% for all products. This represents a decrease of 0.1 percentage points and 0.4 percentage points respectively compared to the previous year. The companies surveyed were GS Retail, CJ ENM, Hyundai Home Shopping, Woori Home Shopping (Lotte), NS Shopping, Home&Shopping, and Gongyoung Home Shopping.
The average sales commission rate for TV home shopping was 28.7% for all products and 30.1% for SME products, showing a continuous decline for three consecutive years in both categories.
By company, CJ ENM charged the highest sales commission rate for SME products. At 37.1%, it far exceeded the average of the seven companies (30.1%). This was followed by GS Retail (35.2%), Hyundai Home Shopping (35.0%), NS Shopping (33.5%), Lotte (30.9%), Home&Shopping (20.8%), and Gongyoung Home Shopping (20.4%). The commission rate gap between CJ ENM and Gongyoung Home Shopping approaches a staggering 17 percentage points.
For all products, NS Shopping had the highest sales commission rate at 35.5%. CJ ENM ranked second with a commission rate of 34.2% across all products. Hyundai Home Shopping was third at 29.2%. GS Retail (28.7%), Lotte (28.5%), Home&Shopping (22.3%), and Gongyoung Home Shopping (20.4%) also maintained rates in the 20% range.
The figures reflect the actual burden on suppliers based on the home shopping sales commission calculation standards, including delivery costs borne by the home shopping companies. Since 2019, the Ministry of Science and ICT has been disclosing these figures to encourage the expansion of sales channels for SMEs and the reduction of sales commissions through autonomous competition within the home shopping industry.
In this survey, the key public responsibilities of TV home shopping companies related to SME support functions?such as the programming ratio of SME products, sales commission rates, and the programming ratio of fixed commission broadcasts?generally maintained the 2019 levels.
Last year, the programming ratio of SME products accounted for 70.6% (42,780 hours) of total broadcast time, similar to the past two years. However, the programming ratio of SME products during prime time, when viewers tend to purchase more products, was 66.2% (15,110 hours), slightly down from 67.1% the previous year.
The number of SMEs whose products were sold through TV home shopping was 3,880, and the number of programming instances was 53,492, both increasing compared to 2019.
The fixed commission broadcasts for SME products, which contribute to the sales commission burden on SMEs, totaled 5,138 hours, accounting for 8.5% of total broadcast time. This is a decrease of 0.7 percentage points from 5,537 hours in 2019.
Meanwhile, last year, the total sales of the seven TV home shopping companies amounted to 5.8948 trillion KRW, and operating profit was 744.4 billion KRW, representing increases of 5.9% and 15.8% respectively compared to 2019.
The Ministry of Science and ICT stated, "We plan to continuously encourage TV home shopping companies to faithfully fulfill their public broadcasting roles, such as expanding sales channels for SMEs, by disclosing key statistics related to SME support and strengthening related evaluations during license renewals."
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