[Inside Chodong] 30th Anniversary of Home Shopping: Growth Lies Beyond Regulation

30 Years of Home Shopping: Time to Prepare for the Next Decade
Excessive Regulatory Shackles Prevent Timely Response to Market Trends

This year marks the 30th anniversary of the domestic home shopping industry in Korea. Since the launch of the first TV home shopping channel in 1995, it has established itself as a major platform connecting small and medium-sized enterprises (SMEs) and consumers based on a nationwide broadcasting network. At one time, when a product appeared on the broadcast, sales surged rapidly, earning it the nickname "Magic Channel." However, the industry has now passed its maturity stage and entered a phase of structural crisis.

In 2023, the total transaction volume of domestic TV home shopping was approximately 20 trillion won, a 7% decrease compared to the previous year. The fact that this marks three consecutive years of decline indicates that this is not simply an issue of economic downturn. It is evidence that the industry's fundamental competitiveness is weakening. Naver Commerce increased its sales by nearly 15% in the same year, surpassing an annual transaction volume of 50 trillion won. The market has already shifted its focus to mobile-based digital platforms.

While digital platforms rapidly evolve with the spread of shorts content, mainstreaming of influencer marketing, and real-time consumer feedback structures, home shopping remains shackled by excessive regulations, unable to respond flexibly to market trends.

Current home shopping broadcasts must undergo a prior review process to schedule products, and regulations on expression levels and wording are strict. Although these measures were introduced under the pretext of consumer protection, in reality, they hinder creativity in content planning and reduce the dynamism needed to respond swiftly to market reactions.

On digital platforms, anyone can quickly introduce products and reflect consumer responses in real time. In contrast, home shopping struggles to keep up with rapidly changing consumer patterns. The rules of competition themselves are different.

The same applies to the sales commission cap (35%) and the mandatory scheduling ratio for SME products (20%). Systems intended to protect SMEs have instead restricted content diversity and limited consumer choice. The broadcaster re-approval system also impedes flexibility. By incorporating difficult-to-quantify factors such as SME support performance and social contribution into evaluations, broadcasters focus more on fulfilling formal requirements than on creative content planning. Although these systems aim to ensure the public nature of broadcasting, it is time to review their effectiveness considering the changed market environment.

Home shopping is not merely a distribution channel. Especially TV home shopping has played a public platform role by lowering market entry barriers for SMEs and small business owners based on its strong nationwide reach. To continue this role, the regulatory environment that restricts the industry's self-sustainability and creativity must be revised.

This does not mean abolishing all regulations. Minimum measures for consumer protection and fair trade order are necessary. However, the current structure, where the government intervenes excessively in content planning, product scheduling, pricing policies, and commission structures, is no longer sustainable.

Thirty years since the industry's inception, home shopping is now at a point where it must prepare for a new decade. Regulations should not be tools to suppress the industry but guidelines to direct change. For home shopping to regain competitiveness in the digital era, the government's role must shift from that of a manager to a "facilitator."