THE TELESHOPPING BUSINESS IN INDIA
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continued from : TELESHOPPING TRAUMAS
Problems were further compounded due to limited reach of teleshopping products.
The networks focused mainly on metros and B-class cities, neglecting towns
and semi-rural areas which also had a growing base of educated and premium
end customers who aspired for convenience and novelty products.
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To address this problem, major teleshopping networks announced plans to expand their
distributor base and extend their reach to all corners of India. Every
distributor or franchisee was supplied with a minimum stock level, based on the
expected market of the product in that specific region. The players also
entered into marketing agreements with leading retail outlets in various
cities, where their range of products could be displayed.
However, with all the networks preparing to leverage
the growth potential in the market, the competition was expected to
intensify. To withstand competition, it became essential for teleshopping
networks to continuously innovate and offer new products. This posed a
serious challenge for them. The biggest threat for teleshopping, however,
seemed to be the emergence of interactive home shopping, wherein the
retailers and consumers used interactive electronic systems such as a
digital TVs or the Internet (popularly called e-tailing) to buy products
online. The concept was still in its initial stages in the early 2000s.
However, industry observers felt that it would not be long before this
concept became popular, given the growing techno saviness of Indian
consumers and the increasing Internet user base in the country. It was being increasingly felt that the networks which did
not embrace this new phenomenon would find it difficult to survive in the
coming years. |
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FUTURE PROSPECTS
Despite all the above problems, the teleshopping market was believed to hold a
lot of potential in India. This was primarily on account of the increasing base
of convenience-seeking people and the middle-class population. As the standard
of living of these people improved, they became more receptive towards trying
out innovative products and concepts. Teleshopping networks, therefore, focused
on integrating their operations and increasing their reach for these customer
segments.
The decision to offer online-shopping services through special retail websites
was made with the same objective. By mid-2002, most of the major networks such
as Telebrands and ASK were deriving their revenues from three sources - websites
(www.asianskyshop.com and www.telebrandsindia.com respectively), teleshopping
and retail outlets, with a major part of the revenues coming from the
teleshopping (franchise centers). The revenues from websites were low due to the
lack of online purchase awareness among the customers and the low rate of credit
card penetration in India.
Since global teleshopping networks proved to be a huge success, there seemed to
be a strong possibility of their being successful in India, as well. But for
that, teleshopping networks would need to play their cards right. (Refer Exhibit
II for the key success factors for a teleshopping network), it would not be too
far-fetched to think of 24-hour dedicated teleshopping channels in India in the
future.
QUESTIONS FOR DISCUSSION
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