Eastern Home diversifying boldly

Following six years of development, Eastern Home Shopping Network (東森得易購) plans to move into China and mobile phone-based electronic commerce this year, strategies which its competitors have dismissed as impractical.

Eastern Home's four channels, down from five last year to cut back on investments, only started to break even in the latter half of last year. It raked in NT$35 billion (US$1.08 billion) in sales last year and conservatively expects to post 10-percent growth this year.

But the nation's largest TV shopping service provider has been eager to expand into new markets.

"We're cautious in evaluating the market across the Taiwan Strait and plan to test the water there by launching one of our leading own-brand lines," said Jennifer Sung (宋湘嵐), president of Eastern Home, at a press event yesterday.

Restricted by China's laws, which stipulate that TV stations cannot air live programs and forbid companies from running businesses across different regions, Eastern Home decided not to go it alone in China.

Instead, it will seek cooperation with China's department stores and establish independent outlets to sell De Mon-brand cosmetics.

Sung said the company has filed applications for operating licenses and merchandise inspection from authorities in Beijing and Shanghai, and hopes to begin providing services in the third quarter.

While there might be more variables in its expansion westward, Eastern Home has teamed up with Far EasTone Telecommunications Co (遠傳電信), the nation's No. 2 mobile carrier, to offer shopping services via mobile phones from the middle of this month, Sung said.

"With the high penetration rate of cellphone usage and popularity of multi-functional mobile phones, we're confident that mobile shopping has great potential and that users will get more used to making purchases on the small screen," she said.

Due to the limited number of third-generation (3G) users, the TV shopping network will first tap into the second-generation market, offering lower-priced products, before moving into 3G, which provides e-mail, high-speed Internet and live sound and image broadcasts to compatible handsets.

Eastern Home's seemingly creative and aggressive approaches, however, were ridiculed as mere marketing stunts by its smaller rival, Fubon Multimedia Technology Co (富邦媒體科技).

Fubon Multimedia, an affiliate of Fubon Financial Holding Co (富邦金控), entered the TV shopping industry in January last year with a single channel.

"Since Eastern Home is barely making a profit from its current operations, how will it make money by entering the China market?" asked Fubon Multimedia's spokeswoman Jean Chen (陳景怡) during a phone interview.

"Besides, no one wants to do their shopping via cell phone. Otherwise we'd have tapped into this segment as Fubon Financial owns Taiwan Mobile Co (台灣大哥大)," she said.

Fubon Multimedia said it expects to boost sales by introducing more products from overseas.