Big business groups moving into TV home shopping market

July 8, 2004

Taiwan's top two telecom competitors Taiwan Cellular Corp. and Chunghwa Telecom are now set to see their battlefield expanded into the TV home shopping market beginning in 2005. Taiwan Cellular, as part of a business team led by Fubon Group's Fubon Financial Holding Co., plans to become Taiwan's second largest TV shopping store, behind current market leader Eastern Home Shopping Network, by posting revenues of NTD 3 billion next year. Chunghwa plans to enter the home shopping market in the first half of 2005. Uni-President Enterprise Corp. and Cathay Financial Holding Co. are also making preparations to enter the home shopping market.

Taiwan Cellular's team, which is still holding talks with various cable television operators, intends to run its home shopping operations over a single cable channel and expects to open shop in January 2005.

Also joining Taiwan Cellular on the Fubon team will be home-delivery service provider Taiwan Pelican Express Co. Fubon will make use of the strengths of each partner. It will use Taiwan Cellular's customer service call center and Taiwan Pelican's delivery services, while Fubon's own financial services will also play an essential role. Thinking big, Fubon even hopes to sell insurance and other financial products on television.

Chunghwa Telecom, which is already preparing to test its multimedia-on-demand (MOD) shopping system, plans to enter the home shopping market in the first half of 2005. However, in a unique move that leverages its position as operator of the Hinet Internet service, Chunghwa intends to utilize the Internet and its MOD system rather than go through cable television operators. Chunghwa compares the shopping system it is developing to that of a giant, 24-hour shopping mall in which customers are able to browse all available products, and return to choose the ones they wish to purchase, at their leisure, while it likens the systems of standard TV shopping programs to a night market which is only open between certain hours and purchased must be made on the spot with no chance of going back after the market is closed.

There have also been recent reports that Uni-President Enterprise Corp., Taiwan's biggest food maker and the operator of 7-Eleven convenience stores, and Cathay Financial Holding Co., Taiwan's largest financial holding company, are making plans to provide TV shopping services.

It is reported that Uni-President plans to begin broadcasting its own TV home shopping programs in October. It is teaming up with a number of its subsidiaries, including 7-Eleven, the delivery service Takkyubin, the health and beauty products chain Cosmed, Starbucks coffee shops, the Internet bookstore books.com.tw and the Bcity online shopping platform.

Cathay Financial Holding Co. is reportedly seeking to form a partnership with current home shopping leader Eastern Home Shopping Network. Cathay intends to use its eight million insurance policy holders and 3 million credit card holders as its foundation for expanding into the television home shopping market.

Eastern Home Shopping Network, having endured four years of hardships establishing the home shopping culture in Taiwan, now boasts annual revenues of NTD 30-50 billion, while the market as a whole generates revenues of over NTD 100 billion a year. Eastern Home's operations have grown to three TV channels, broadcasting, catalogues and the Internet, and it will further expand to five TV channels in January 2005. (Economic Daily News, Taipei Times)

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