Year-End Consumer Grab in Full Swing... Intense Discount Events on Home Shopping and E-commerce

Home Shopping Companies Run Coupon and Discount Promotions Until the End of This Month
November Discount Events Clash Between Gmarket and 11st

Home shopping companies and open market operators are conducting large-scale discount events ahead of Black Friday, the biggest event of the year. Their plan is to increase customer inflow and boost sales through major promotions to enhance profitability.

According to the industry on the 6th, Hyundai Home Shopping is holding ‘Super H Festa,’ the largest event of the second half of the year, until the 31st of this month, offering various shopping benefits such as discount coupons and free gifts. They are providing discount coupons to the first 50,000 customers daily and offering 10% of the payment amount back in H Points, among other exceptional benefits. CJ OnStyle is also running its largest event of the second half, ‘Come On Style,’ until the 15th. Customers receive a 10,000 KRW coupon daily just by purchasing one product, and when purchasing key brand products, they can earn up to 20% of the purchase amount in points.

GS Shop is conducting the ‘Beyond Imagination’ special event throughout October, providing customer benefits such as points based on purchase amounts and a 7% card discount. NS Home Shopping will run the ‘Cheer Up 50 Million KRW Project’ from the 10th to the 31st, giving customers who purchase event products during broadcasts a total of 50 million KRW in points. Lotte Home Shopping will also hold the massive shopping event ‘Gwang Click Festival’ from the 12th to the 22nd, offering abundant benefits including shopping support funds, points, prizes, and participation events.

The home shopping industry aims to capture customer demand early by avoiding November, when consumers flock to major distribution channels such as department stores, large supermarkets, and e-commerce. There is also an intention to compensate for losses with ‘surprise events’ in October, a month typically marked by low TV ratings. An industry insider said, “Every October, the home shopping industry launches large-scale promotions to retain consumers. Since demand for fall and winter clothing increases, various benefits are expected, especially in the apparel category.”

In November, open market operators Gmarket and 11st will compete head-to-head. Gmarket will hold the ‘Big Smile Day,’ while 11st will run the ‘Grand 11th Festival’ discount event. Both start on November 1. As these are the biggest annual events, both companies are putting all their efforts into preparation. Although these events are held every November, this year’s events carry special significance. They are the most important events for the two companies to solve the challenge of ‘turning a profit.’ While the margin left to the companies is not large due to the biggest discount benefits offered throughout the year, November is a crucial month that cannot be missed as sales growth and customer retention are desperately needed.

Gmarket has consistently stated its intention to turn a profit in the fourth quarter this year. Since the acquisition by Shinsegae, it has only posted losses since the first quarter of 2022, so it has not shown remarkable results, but it aims to prove the company’s value in the fourth quarter. This is also the biggest challenge for Gmarket CEO Jeon Hang-il, who avoided the personnel shakeup at Shinsegae Group this year. Looking at the first half results, there was an operating loss of 9.5 billion KRW in the first quarter and 11.3 billion KRW in the second quarter. Although the deficit narrowed compared to the previous year, it is not a situation where a fourth-quarter profit can be guaranteed. A Gmarket official explained, “Big Smile Day happens twice a year, but the scale in November is bigger than in May. We will strengthen marketing such as coupons to attract consumers and ensure they receive the maximum benefits.”

The situation at 11st is not much different. In June, it unusually disclosed the performance of its open market business division, raising expectations for upward performance trends in the market, but to maintain profitability until the end of the year, a ‘big hit’ to boost performance is needed. Moreover, 11st failed to meet its planned initial public offering (IPO) schedule in September, and now faces the obligation to repay about 700 billion KRW to existing investors. To attract new investors, it must demonstrate strong corporate health. Although most of the annual marketing budget is usually spent on the 11th Festival, this year they reduced the October discount events to focus their efforts on the 11th Festival. An 11st official said, “Since this is the biggest discount event of the year, the margin is not high, but the goal is to attract customers. Improving performance to increase corporate value is currently the company’s biggest objective.”