The Teleshopping Business in India

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Teleshopping Traumas Contd...

According to market sources, Telebrands was the only network that was able to sustain itself and make profits - though it was attributed by many to the strong support it received from its parent company, Telebrands Inc. The reasons for the slow growth of the teleshopping market in India were many, the most important being the abundant supply of imitation product.

Local entrepreneurs copied the products advertised on TV and very soon the markets were flooded with imitated versions of these products. These products were not only cheaper compared to organized sector products, but also offered consumers the facility to personally touch and appraise them. Mahesh Panna of Telebrands said, "What happens is that we come out with a product and it is promptly copied by a local player. He obviously sells it at a lesser price. This way the whole market goes out of our hands." To address this problem, networks such as Telebrands and ASK opened special retail outlets in all major metros and semi-metros to enable customers to personally appraise the products offered, before making a purchase decision. Apart from the new products, the companies also retailed those products, which had been taken off air (to make place for new products) but still had potential for sale. However, the local retailers still enjoyed a substantial price advantage over the teleshopping networks due to local manufacturing, low transportation costs and elimination of distribution/delivery costs.

Though the teleshopping networks claimed that their pricing strategies were in tune with the target customer's profile, the reality was very different. The higher prices were proving to be a major hindrance for the growth of teleshopping networks. Most of the products were priced between Rs 1,000-5,000. Customers were found to be unwilling to pay this amount for lifestyle products that ranked rather low in their household purchasing priority list.

The differences in the culture and language also posed problems and hampered the prospects of teleshopping market in India. As teleshopping networks needed to telecast their programs in different regions, they dubbed most of their infomercials into the regional languages. However, they failed to have any impact in prospective customers as they did reflect the native culture of the region. Another major problem for the teleshopping networks was the growing criticism for some of its products.

There were a host of products that claimed to do 'seemingly impossible' tasks for consumers. For instance, products promising to reduce weight, remove unwanted hair, improve posture, improve hearing and cure chronic diseases were eyed with suspicion by a majority of Indians. Also, the 'over-enthusiastic' and 'chirpy' foreign models that appeared in the dubbed infomercials were criticized on the grounds of being rather awkward mouthing dialogs in Hindi and other regional languages.

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. To address this problem, major teleshopping networks announced plans to expand their distributor base and extend their reach to all corners of India.

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