QVC Opens Shop in China QVC与中央人民广播电台合作运营电视购物频道

By newsdoug on March 21, 2012

QVC opens shop in China Watch out Chinese shoppers, a new big player is coming to town in the form of QVC, an American name synonymous with TV and online shopping. In a twist that looks interesting, the US shopping giant has chosen neither a TV operator or an e-commerce specialist as its Chinese partner, but rather a major radio station operator, China National Radio. (English article) The deal marks the latest in a string of new Sino-foreign tie-ups in the sensitive Chinese media market, which Beijing seems to finally be opening to foreign investment after years of keeping the sector largely closed to outsiders. It should also provide some interesting competition to existing players in both the TV and online shopping space, including shopping channels operated by the likes of Shanghai Media Group, the nation’s second largest media company, and Tianmao, the hugely successful online mall previously known as Taobao Mall, which is operated by Alibaba Group, China’s leading e-commerce company. Let’s have a quick look at the deal itself, which will see QVC take its show to China by teaming up with China National Radio to operate its CNR Mall TV channel, which also has an associated web site, in a joint venture called CNR Home Shopping Company. I’ll be the first to admit I’ve never heard of CNR’s shopping channels, and suspect they are tiny players in both the TV and online shopping markets. The entry of this well-known US partner into the equation could quickly change that, however, as QVC is hugely popular in the US, where it pioneered the home shopping concept and has exported the idea to places like Britain, Germany and Japan. Of course, the entry of a strong foreign partner is far from a guarantee for success, as other big media names like Viacom (NYSE: VIAb) have joined forces with major Chinese media groups in the past only to see those ventures fail, often due to lack of critical government support. The big difference this time is that China has shown a recent desire to finally open up the media space to foreign investment, and thus may be less likely to try to undermine such tie-ups like it did in the past through onerous regulations and other regulatory obstacles. The new openness to foreign investment has been on display over the last few months, with DreamWorks Animation (NYSE: DWA) announcing a landmark animation-producing joint venture in Shanghai (previous post), and the New York Times (NYSE: NYT) also launching a China-based science magazine (previous post), both in February. At the same time, a growing stream of Chinese media companies have also made or announced plans for IPOs, again indicating Beijing wants these companies to become more commercially oriented and competitive. Following this early string of deals, I would look for more Sino-foreign tie-ups to come in the media sector this year, potentially involving some major global names as they take a new look at the China market.

Bottom line: QVC’s new China joint venture marks the latest recent entry by a major foreign firm into China’s media market, with more likely this year as Beijing opens up the sector.

Enjoy this blog? Please spread the word :)