The phones are ringing off the hook at television home shopping company QVC. QVC (its name stands for "quality, value, and convenience") offers about 1,150 items each week to TV-tied consumer shoppers. Merchandise includes apparel, cosmetics, electronics, housewares, jewelry, and toys. It broadcasts 24 hours a day; viewers call in their orders to one of its three US call centers. If you can't find what you're shopping for on the tube, it also sells online, through mobile apps, and some half dozen outlet stores in four states. The company has shopping channels in Germany, Japan, Italy, and the UK. QVC is a subsidiary of shopping and travel site operator Liberty Interactive (formerly Liberty Media).
The US is QVC's largest market (65% of 2011 sales), followed by Japan (14%), Germany (13%), and the UK (8%). Less than 1% of its sales come from Italy, its newest market. Its 24-hour-home-shopping network reaches 100 million US homes and 40 million viewers in Germany and Austria.
QVC has operations in the US, the UK, Germany, Italy, and Japan. Recognizing growth potential in China, QVC established a joint venture there in 2012 with China's government-owned radio division, China National Radio (CNR).
Sales and Marketing
While the phones are still ringing at QVC call centers, business is booming on its QVC.com website. In 2011 about 37% of the company's US revenue and 31% of its total revenue were generated from sales of merchandise ordered online and via mobile applications.
After a couple of tough years during the global recession, QVC is back in sales growth mode. In 2011 global sales topped $8.2 billion, up 6% vs. 2010, after increasing by 6% in 2010 vs. 2009. Sales increased in all of the retailer's markets, with Germany and Japan posting double-digit sales increased in 2011, while the UK and US saw more modest growth. The company credited its revenue growth in the US to an 9% increase in average selling price, offset by a 4% decline in units sold. Strong performing merchandise categories included electronics, home goods, and accessories. QVC's profitability is also on the rise, with operating income up 12% since 2009.
A key part of QVC's strategy is to expand across new borders, China being a main one. It entered that market in 2012 through a Beijing-based joint venture called CNR Home Shopping Co., Ltd. (CNRS). QVC holds a 49% stake, while partner China National Radio owns the remaining 51%. The JV operates a multimedia retailing business in China through the CNR Mall TV shopping channel and its e-commerce site. The CNR Mall channel reaches about 35 million homes in China.
The video and e-commerce retailer is looking to connect with its customers in other ways as well. To that end the company has agreed to acquire Oodle, Inc., a social commerce firm that runs the Oodle Marketplace application on Facebook. The deal is expected to close by the end of 2012.