Leaving China
South Korean infomercial companies are leaving the Chinese market one after another. For example, Lotte Home Shopping, which is currently doing business in Chongqing, Shandong and Yunnan, is trying to sell the management rights for Shandong and Yunnan six years after the sale of the management rights covering Heilongjiang and Henan. The contract for Shandong expired in December last year and that for Yunnan expires in February next year.
According to industry sources, Lotte Home Shopping may completely withdraw from the market. The company has only two employees in China now. In Chongqing, in addition, it changed its position from an operator to an equity investor while liquidating the previous corporation and establishing a new one early this year.
Hyundai Home Shopping, in the meantime, has failed to broadcast its programs since April last year due to conflicts with its joint venture partner Jiayou Home Shopping, which is asking Hyundai to shut down its business for the business performance of Hyundai Jiayou Home Shopping.
In 2012, CJ O Shopping had to sell 11% out of its Dongfang CJ shares, 26%, to a local joint company due to an unreasonable request from its joint venture partner, too. Besides, its sales have halved since China’s trade retaliation that has followed THAAD employment in South Korea. Under the circumstances, South Korean infomercial companies are increasingly avoiding the Chinese market.
“A large number of them entered the Chinese market in the early and mid-2000s, but more and more of them are leaving it these days due to its poor logistics and transportation systems and so on,” said an industry insider, adding, “The trade retaliation and joint venture partners’ excessive requests are fueling this trend as well.”