Hyundai Home Shopping Network Corp., one of major home shopping companies in South Korea, is expected to record earnings this and next year thanks to burgeoning sales in its fashion unit and online shopping mall.

Unlike its rivals struggling amid growing competition from similar service providers and e-commerce sites, Hyundai Home Shopping has seen a steady growth in sales over last few years. Its sales jumped from 514.8 billion won ($459.2 million) in 2010 to 896.0 billion won in 2015, and industry experts forecast that its annual sales should grow to the mid- to high 900 billion won level this year and exceed 1 trillion won next year.

Operating profit is also expected to grow more than 30 percent this year on year, rebounding from a 28 percent on-year fall to 104.6 billion won last year. Operating profit for the second quarter ended June this year ascended 30 percent on year to 33.8 billion won.

“Hyundai Home Shopping has successfully differentiated itself from its rivals, a move that has helped it get ahead in heated competition in the market,” said Lim Young-joo from Heungkuk Securities Co. “Its operating profit is expected to grow by double digits at least until 2018.”

The company has aggressively promoted exclusive products and brands to lure and retain customers who are highly loyal to certain brands. The share of exclusive products that can be found only at the company’s shopping channels expanded from 28 percent of its total sales in 2013 to 32 percent last year, and is expected to reach 50 percent by 2020.

Its affiliates including Hyundai Department Store Co., Handsome Corp., Hyundai Livart Furniture Co. and Hyundai Green Food Co. have also aided the recent growth in the company’s earnings. Handsome Corp., fashion unit of Hyundai Group launched a Hyundai Home Shopping exclusive brand Mothan in September 2015 and plans to release Mothan Homme in the latter half of this year. The home shopping company is also reaching out to more upscale shoppers by adopting VIP marketing and strengthening luxury brand line-ups.

Backed by the latest efforts, Hyundai Home Shopping’s sales from fashion division gained 19.5 percent on year in the April to June period this year. It is the only major home shopping company in Korea that saw the total value of goods and services handled via TV channels grow for two consecutive quarters, up 5.5 percent on year in the first quarter this year and 7.5 percent in the second.

Sales from its online mall Hyundai H Mall has been also growing thanks to its strategic partnerships with local open-market platforms such as G Market and 11st. The total value handled by Hyundai H Mall rose 19.1 percent from the same period last year to 688.2 billion won in the first six months of this year.

The growth of Hyundai H Mall has largely helped to improve profitability in Hyundai Home Shopping, said Yoo Jung-hyun from Daeshin Securities Co.

Its relatively ample cash has also allowed the Korean home shopping company to aggressively seek for mergers and acquisitions. Hyundai Home Shopping and Hyundai Department Store were shortlisted in the bid for Tongyang Magic Inc., local kitchen appliances manufacturing and renting firm, and are currently conducting due diligence. The company expects that the potential acquisition of Tongyang Magic would help reinforce its home appliance sale division.

Hyundai Home Shopping shares were up 1.6 percent or 2,000 won at 124,000 won as of 02:02 p.m. on Wednesday.

By Chae Jong-won

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]