The phones are ringing off the hook at television home shopping company QVC. QVC (its name stands for "quality, value, and convenience") offers about 1,000 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 at QVC.com, 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.
The US is QVC's largest market, contributing two-thirds of its total sales, followed by Japan (15%), and Germany (11%). The UK and the company's newest market, Italy, make up the rest. QVC operates eight distribution centers and eight call centers worldwide.
The video and e-commerce retailer 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
QVC distributes its programming through affiliation agreements with many television providers, including Comcast, Time Warner Cable, DIRECTV, and DISH Network in the US; JCN, Jupiter Telecommunications in Japan; Kabel Deutschland in Germany; British Sky Broadcasting and Virgin Media in the UK; and Telecom Italia Media Broadcasting in Italy.
While the phones are still ringing at QVC call centers, business is booming on its QVC.com website. In 2012 the company's global e-commerce sales totaled $2.9 billion, or 34% of its consolidated sales.
After a couple of tough years during the global recession, QVC is solidly back in sales growth mode. In 2012 global sales topped $8.5 billion, up 3% versus 2011, after increasing by 6% in the prior annual comparison. Sales increased in all of the retailer's markets, with the exception of Germany where sales fell by 10%. Japan posted an 11% gain in sales, while the US and UK saw more modest sales gains. The company credited its revenue growth to an 3% increase in average selling price and an increase in shipping and handling revenue.
QVC's profitability is also on the rise, with operating income up 11% in 2012 versus 2011, to nearly $1.3 billion.
From its roots in television shopping, QVC's goal is to entice buyers across all forms of media, including TV, the Internet, and mobile devices. With about 90% of its business coming from repeat customers, the company is looking to international markets for additional customers. China is one such place. QVC entered China 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 48 million homes in China.
Mergers and Acquisitions
Looking to connect with its customers in other ways, such as social commerce, in late 2012 QVC acquired Oodle, Inc's. US operation, a social commerce firm that runs the Oodle Marketplace application on Facebook.
QVC is a wholly-owned subsidiary of Liberty Interactive Corp. and contributes about 85% of its parent company's revenue. Liberty Interactive (formerly known as Liberty Media Corp.) took full ownership of QVC in 2003 when it bought the portion of the company owned by Comcast.