gsshop-homeshop18GS Home Shopping, South Korea’s largest home shopping retailer, has entered the Indian market with a strategic investment of $18.5 million in Indian peer HomeShop18. Homeshop18 parent company Network18 will also invest $5 million in the venture. The investment from and the strategic tie-up with GS Shopping is expected to help HomeShop18 counter the emerging threat from the still-being-piloted STAR CJ Network India, a 50:50 joint venture between News Corp owned STAR India and another Korean company, CJ Home Shopping. GS Shopping has been eying the Indian home shopping market since 2007. When we had contacted Network18 CEO Haresh Chawla earlier today, he had declined to confirm or deny the development.

GS Home Shopping will hold 15% equity stake in Homeshop18, while Network18 will remain a majority shareholder with 51% stake on a fully diluted basis. Homeshop18 is something of an out-performer in the Network18 group of companies. For the quarter ended September 2009, it reported revenues from commissions of Rs. 108.38 million, doubling year on year, with gross sales have crossed Rs. 450 million in the quarter ending September 2009.

Preparing For STAR CJ Competition

With the launch of the STAR CJ network on the horizon, Homeshop18 has recently upped its distribution: previously it was primarily available on cable channels, but just two days ago, it accoIt appears that the Network18 company, which has primarily been available on cable channels so far, has announced a partnership with DTH networks Dish TV, Airtel Digital TV and Videocon’s d2H services. It has now launched as a 24 hour channel, and claims a logistics footprint of nearly 2750 cities.

For STAR-CJ, CJ Home Shopping is expected to bring to the table products and tie-ups with brands, and much the same is expected for Homeshop18 from GS Shopping. GS Home Shopping will also help Homeshop18 in sourcing, merchandising, broadcasting and logistics, apart from Homeshop18 employees being trained in Korea.

Related:

— Sep09: Network18 Net Loss At Rs. 833.63M; HS18 Sales Cross Rs.450M; IBN18