MediaNama recently spoke with Paritosh Joshi, CEO of STAR CJ Network India Ltd, a 50:50 joint venture of News Corp owned Star TV and South Korean firm CJ Shopping, on how the company intends to compete in the Indian home shopping market dominated by Network18s HomeShop18, distribution plans, mobile and Internet plans. Part 2 of the interview:
What are your expansion plans?
I think all I can say right now is it is going to be extremely deliberate and almost cautious about it, because we are only going to be prepared to start the rollout once we are completely convinced that our ability to do fulfillment is in terrific shape. So if that means that we will be somewhat slow, we believe that it is justifiable.
In our business, no matter how quickly a particular homeshopping unit delivers we are still talking about days not hours. And over the days, the consumer gets plenty of opportunity for their post purchase dissonance, and that leads to situations where you take the product to the consumers home and the consumer says they did not order the particular product. They refuse to take the delivery. So the longer you delay the delivery the more likely it is that you will simply lose the order to a consumer’s remorse. So for that reason itself it is critical that you get it across quickly. But you can also flip that around in a positive way. The positive part is that once consumers buy something they want to enjoy it. If you have to wait for month for a delivery of a car that you’ve just bought, then that month is the longest wait of your life.
Are you then to only products a consumer cannot buy quickly from the market next door?
No, no not at all. As a matter a fact every category is open because there are many inhibitors because of which consumers for one reason or the other don’t land up going to a store to shop. In cities like Mumbai and Delhi, traffic is a pain, trying to find parking is a pain and once you get to the store grabbing attention of the salesperson is a pain. Having shopped for everything, putting it back in your car and taking it back home, getting it installed and functioning is a pain. So, it’s not straight forward. Each of these comes as an inhibitor to the consumer. In homeshopping you solve all of it.
So you will also be warehousing your products?
Yes absolutely, we will have distribution centers, we already have two, we have one in Bhiwandi to service Nasik, Mumbai and Pune and one in NCR, just outside Gurgaon that services the NCR.
When you launch your own home shopping channel?
Our own first independent channel? We are hoping that it will be up on air before we are done with the first calendar quarter of 2010. This is subject to….we are ready to roll but we have to comply with the law so the moment we are completely able and properly licensed we are ready to roll.
Going back to the earlier question: by when do you see a pan India distribution coming in?
Pan India is a very different issue with us. The issue is you can’t seriously consider servicing India with homeshopping without having multiple languages in content; you certainly cannot endeavor to be a pan India operation with only an English or Hindi channel.
In that context, why you are looking at a potential launching one channel as opposed to taking air time on multiple language channels owned by STAR?
First of all, it’s not that any communications strategy is ruled out. All the options are open at this point in time. We could consider being on being slots on STAR network channels considering that we are already on a Star Network channel on Utsav on four plus two hours every day. It’s not that there is any ideological discomfort in doing it or anything like that. Even if we want to do that it is the other major challenge which is that consumer behavior in each part of this country even within the same product category is remarkably different.
I will give you one really silly example; this country has a division on externally fitted lid versus internally fitted lid on the pressure cooker. In North India, it’s the internally fitted lid, while in South, there is more and more externally fitted lid and it’s always been that way forever. It is just how it is, consumer preference has evolved. Going even deeper and start looking at precise nuances in the way that the people consume all sorts of things, you will find huge differences in the way that consumers in different and different states actually behave.
So one of the problem you have as a shopping business is that you actually cannot standardize content except for a very small handful of categories. So you have to recognize that taste and preferences are different and therefore you have to cater to those tastes and preferences in the product you showcase and the manner in which you showcase them.
What is your take on the competition: HomeShop 18 and the investment they got from GS HomeShop?
I don’t want to comment on the investment or anything but I think the work that they are doing is very important, they have been the pioneers of the home shopping category in India. They have actually worked in the direction of giving it genuine credibility and placing it as authentic way of shopping for the consumer. So I think they are doing very valuable work and we will be extremely tough competitors, and the fact that we will compete with one another will work to the benefit of the consumer, and it will mean that the awareness about this service category will grow. People will have a better understanding of what’s going on.
So it’s true in every sense that it takes two to tango and the fact that they are already there and we are there means that the category can actually expect to grow more quickly than it would have done if there were only one player.
Since you would have the distribution in place, will you be also looking at the Mobile and Internet for retailing? When can we see something on the Internet and Mobile launch?
Home shopping internationally uses all possible non-store mode: People use the Internet, catalog, mobile, and the fact is that over a period of time all those options are very real and legitimate options for us to pursue in India as well. The launch is some time out. For us right now the focus is clearly on television. Everything else will take its own time, it is not our most important priority right now. Our most important priority is to get the channel up.
Read Part 1:
On Distribution Plans, Costs, Changing Perception