The Teleshopping Business in India

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How the Indian Teleshopping Market was Won Contd...

To ensure success, teleshopping networks paid special attention to their pricing strategies. In the initial years, most of the products offered by these networks were lifestyle products that came last in priority of a typical Indian household. Though the price of the products offered by various networks in the late 1990s was as low as Rs 500³, most of them were priced at a premium to target the upper classes.

However, over the years, the number of utility products increased and the price of the products was also brought down to make them more affordable. In 2002, the price of the articles offered ranged between Rs 200 to Rs 12,000, with a majority of the products falling in the Rs 1,000-5,000 range. The teleshopping networks competed with each other in terms of offering the same benefits at lower prices. This was particularly observed for various weight reduction products. All the networks marketed different gadgets that claimed to reduce weight derided the offerings of rival teleshopping networks claiming to be cheaper and much more effective. Hectic activities took place on the promotional front as well, with networks offering 'early bird' prizes, price reductions, money return (if not satisfied with the product) offers, free accessories and double product packs at the same price. For effective distribution of their products, the networks focused on strengthening their franchisee base across the country. All the major networks in India had their franchisers across major metros and semi-metros in the country.

Towards the end of the year 2001, the franchisee network of Telebrands India extended to over 90 cities across the country, while ASK's network spanned across 60 cities. The networks provided the telephone numbers of all their distributors at the end of their infomercials, so that the customers could call their nearest distributor for further enquiries or to place an order.

On receiving a purchase order from a customer, the product was delivered to him/her through courier. Payment was generally made on delivery of the product. Unlike the late-1990s, when products were only delivered against cash payment, in the early-2000s, the networks began accepting credit cards to encourage customers to respond to their offers.

As a result of all the above initiatives, the awareness about the merits of teleshopping increased. Customers, who followed global trends in lifestyles and product usage, began to buy teleshopping products, and the market picked up momentum. In 2001, the market registered an annual growth rate of over 20% and amounted to Rs 500 million. In 2002, Telebrands led the market with an estimated turnover of over 250 million, followed by ASK with a turnover of over 200 million.

Teleshopping Traumas

Though teleshopping market was showing positive growth trend, its growth rate was much below the expectations of the players involved. According to a report,⁴ most of the teleshopping networks in the country were not making any profits. In fact, TSN had closed its teleshopping activities in 2002 and was concentrating only on online retailing (www.tsnshop.com).

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3] In September 2002, Rs 48 equalled US $ 1.
4] Times of India, September 7, 2002.

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