The Teleshopping Business in India

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Teleshopping Traumas Contd...

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. 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.

Exhibits

Exhibit I: Comparing Mass Marketing and One-To-One Marketing
Exhibit II: Key Success Factors for Teleshopping Market

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