Astro scores home run with home shopping e-commerce venture
By Goh Thean Eu June 22, 2015
- To launch new home shopping channel this year, targeting Chinese segment
- Unique customer base has expanded to 160K from 75K in January
ASTRO Malaysia Holdings Bhd claimed it is seeing good momentum for its recently-launched home shopping and e-commerce business, Astro GS Shop Sdn Bhd.
“I think the traction is good. When we had our soft launch in November last year, we didn’t know whether the market was ready,” said Astro GS Shop chief executive officer Rozalila Abdul Rahman.
“So there was no advertising push at all – we just went on the air, and we started to see a lot of people calling in,” she told Digital News Asia (DNA) on the sidelines of an Astro briefing on its first quarter results on June 17.
During the first quarter ended April 30, 2015, Astro GS Shop recorded revenue of RM37 million (US$9.9 million), about 50% higher than the RM25 million (US$6.7 million) it recorded in the fourth quarter ended Jan 31, 2015.
While the numbers are a small fraction of parent company Astro’s total revenue, which predominantly comes from pay-TV subscriptions, it is nevertheless an important figure because it does provide some picture of how Malaysia’s e-commerce industry is doing.
While there are many e-commerce players in the country, most of them are privately-held and do not publicly disclose revenue.
During the February-April 2015 period, Astro GS Shop also managed to sell 175,000 items, versus 120,000 from November 2014 to January 2015.
Its fiscal first quarter 2015 also saw its unique customer base expanding to 160,000 customers, from 75,000 in the fourth quarter of 2014.
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Market is ready
Astro GS Shop is a joint-venture (JV) between Astro Malaysia and South Korean multimedia retailer GS Home Shopping Inc.
Early this year, the JV – which has a total capitalisation of RM70 million (US$19 million) – officially launched Go Shop, a 24-hour shopping service available on Astro TV (Channel 118), as well as on web and mobile platforms.
Based on the response from consumers so far, Rozalila (pic) believes that the Malaysia market is ready to fully embrace e-commerce.
“The market is ready. The broadband infrastructure [is there], and Internet and e-commerce are becoming prevalent amongst the younger generation,” she said.
Like most e-commerce players, Rozalila also sees huge untapped potential in this space.
For example Moey Tan, chief executive officer of GuoLine eMarketing which runs the online shopping portal GemFive, recently highlighted that the online retail spend in Malaysia is relatively low, representing only about 0.5% of total retail spend.
However, Tan, who cited findings by BCG Analysis in September 2014, said that this proportion will grow to over 5% by 2020 and to 7.9% by 2025.
Also, during the Go Shop launch earlier this year, Astro chief executive officer Rohana Rozhan said that the e-commerce venture would allow the company to “diversify and tap into a growing global industry that is projected to be worth RM3.6 billion (US$960 million) in Malaysia by 2020.”
Rohana also said then that 55% of Internet users in Malaysia shop online, and across multiple devices.
More can be done
Although the potential is huge in this space, Rozalila admits that more can be done by Astro GS Shop to boost sales volume and awareness.
The company has yet to embark on any aggressive marketing and promotional campaign on the various Astro platforms, such as television and radio.
“We only had the first ‘burst’ when we launched the service in January. After that, we did a lot more on our own platform [Astro Channel 118 and its e-commerce and m-commerce portals].
“Moving forward, you will hear more of us on radio stations and start to see us on other TV assets as well. If you are in the digital space, such as Instagram and Facebook, we will be there too,” said Rozalila.
More importantly, the company is also planning to launch a new home-shopping channel later this year, targeting the Chinese Malaysian segment.
The plan to introduce a new home shopping channel targeting at the Chinese market will play an essential part in the company’s revenue target.
“We hope Astro GS Shop is able to hit RM150 million (US$40 million) in revenue this financial year. In five years, we hope we can grow revenue to RM500 million (US$133 million),” said Rohana.
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