CEO Vacancy Continues for 15 Months
Appointment Previously Canceled Amid "Parachute Appointment" Controversy
Public Home Shopping has restarted the process of appointing a new CEO. It has been 10 months since the previous appointment was canceled due to controversy over so-called "parachute appointments." With discussions scheduled for the introduction of a data home shopping (T-commerce) channel dedicated to small and medium-sized enterprises (SMEs), there is speculation that this appointment will focus on professional expertise.
According to industry sources on December 29, Public Home Shopping has posted a public notice for CEO recruitment and is accepting applications until January 5 of next year. The company faces the challenge of resolving concerns over the CEO's qualifications and expertise. Earlier this year, Public Home Shopping conducted an open recruitment process and narrowed down the pool of candidates, but controversy arose because some of the candidates, including former members of the National Assembly, had no experience in the home shopping industry. There were also criticisms that the company was rushing to appoint a new leader ahead of the launch of the new administration.
As a result, after the appointment was postponed at the shareholders' meeting in May, the proposal was rejected again at the July shareholders' meeting, causing the process to return to square one. Public Home Shopping is classified as a quasi-public institution, so the CEO is appointed at the shareholders' meeting without presidential approval. In this process, since former CEO Cho Seongho stepped down in September last year upon the expiration of his term, the company has been under interim leadership for 15 months.
The selection of the new CEO is expected to be influenced by the potential introduction of a T-commerce channel dedicated to SMEs, which is considered one of Public Home Shopping's major pending issues. Unlike live TV home shopping, T-commerce allows for prerecorded product content to be stored in a database and broadcast repeatedly, resulting in relatively lower operating costs. Currently, there are 10 operators in the T-commerce market, including SK Store and KT Alpha Shopping. For operators with existing home shopping infrastructure, this new business is expected to generate an additional 200 to 300 billion won in revenue.
If the introduction of an SME-only T-commerce channel becomes a reality, Public Home Shopping and Home & Shopping are likely to be considered as candidates. On December 17, Kim Youngjoo, Acting CEO of Public Home Shopping, mentioned the need for such a channel to President Lee Jaemyung during a business report to the Ministry of SMEs and Startups at the Government Sejong Complex, stating, "Please consider us in the selection process for the new T-commerce channel."
This discussion is also closely tied to Public Home Shopping's management conditions. The company’s operating profit plummeted from 14.8 billion won in 2022 to 3.1 billion won in 2023, and last year, it posted an operating loss of 1.1 billion won, returning to the red. After recording its first profit since its launch in 2020, thanks to the COVID-19 boom, the company is now in a situation where it must review its overall revenue structure for the first time in four years.
Meanwhile, as the new year approaches, the appointment of heads of agencies under the Ministry of SMEs and Startups is gaining momentum. Currently, several institutions, including Public Home Shopping, Korea Technology Finance Corporation, and the Korea Small Business Market Promotion Corporation, have vacancies or have seen the terms of their leaders expire. Korea Technology Finance Corporation is accepting applications for its next chairman until January 2 of next year, while the Korea Small Business Market Promotion Corporation is reportedly in the final stages of selecting candidates following its recruitment process last month.
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