The Teleshopping Business in India

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Themes: Marketing Mix
Period : 1990-2002
Organization : Varied
Pub Date : 2002
Countries : India
Industry : Media and Advertising

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Case Code : MKTG036
Case Length : 12 Pages
Price: Rs. 300;

The Teleshopping Business in India | Case Study



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The Indian Scenario

During the early 1990s, Indian laws prohibited customers to import products, without acquiring prior permission from the regulating authorities. These laws also restricted the repatriation of money (out of India), without the prior permission of the country's central bank, the Reserve Bank of India (RBI). This was a major reason for the evolution of teleshopping in India, unlike the US, where teleshopping evolved due to the changing societal norms. During the mid-1990s, Telebrands India, a 100% subsidiary of Telebrands Corp., pioneered the concept of teleshopping in India and soon grew into a leading teleshopping network in the country.

In mid-1995, TSN (another major US-based teleshopping network) and Asian Sky Shop (ASK), owned by the media giant - Zee2, also entered the market. The other major players in the Indian teleshopping market were TVC, TSNM and Star Warnaco. All these networks adopted the following modus operandi:

• Buying time slots on popular channels that had high penetration and enjoyed good viewership among the target customers. These time slots ranged from two minutes to 1 hour and comprised infomercials/product presentations, explaining the product's utility.
• Providing a special product code for every product and displaying it along with its price.
• Setting up call centers in various cities, on the basis of the scale of operations and the extent of penetration expected.
• Providing viewers with telephone numbers of these call centers and asking them to call their nearest call centre for further enquiries or to order the product.

However, the Indian teleshopping network grew at a very slow pace, on account of factors such as the lack of education and awareness among people, low standard of living, low rate of women employment, and low penetration of TVs/telephones. Moreover, unlike the Western countries, shopping for an average Indian had traditionally been an occasion for 'social outing' and enjoyment. The 'feel-and-touch' factor for buying almost anything had always been given great importance.

Thus, teleshopping networks initially had a tough time, to make the concept acceptable. The companies developed several strategies with regard to product offerings, promotional practices, pricing and distribution, to overcome the above hurdles and make a success of their teleshopping initiatives.

How the Indian Teleshopping Market was Won

During the late 1990s, the traditional Indian societal setup of joint families gave way to nuclear families. In the metros and even some smaller cities, the number of families where, both the husband and wife were pursuing careers had increased substantially and there was little time available for shopping outdoors.

Teleshopping companies believed that this segment offered tremendous marketing potential and would easily take to convenient shopping from their homes. In addition, the networks decided to target the premium-end TV viewers, with high purchasing power. The growing sophistication among these customers enhanced their readiness to try new, innovative products, even at a premium.

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2] The Zee group has interests in TV programing, movies, music, IT education and various other businesses. Zee Telefilms Ltd. looked after the group's TV business through channels including Zee TV, Zee Music, Zee English, Zee MGM, Zee News, ZED TV, Zee Cinema, Siticable and the Alpha range of regional language channels.