Amid the Sale of the Market Leader, Government Pushes for a New SME Home Shopping Channel — Mounting Risks of Weak Content and Capital Competitiveness

‘SME-Dedicated T-Commerce’ for Expanding Sales Channels
Industry Voices Skepticism Over T-Commerce Viability
Calls Grow for Industrial Revitalization Before New Channel Launch

The government’s plan to launch a new T-commerce channel exclusively for small and medium-sized enterprise (SME) products is drawing close scrutiny from the industry. While some argue that SMEs and small merchants need new distribution channels to compete against large conglomerates, critics contend that the oversaturated home shopping market leaves little room for meaningful results. Some also warn that despite the policy’s stated goal of supporting SME sales, inherent challenges in content competitiveness and profitability may hinder its success.

Public and SME-Linked Home Shopping Firms Seen as Prime Candidates

According to the home shopping industry on the 27th, the Ministry of Science and ICT — which holds the authority to approve new T-commerce operations — is currently reviewing a research proposal titled “Impact Analysis of Home Shopping Deregulation.” The “Home Shopping Industry Competitiveness Enhancement Task Force (TF),” launched in June last year, is reportedly using this study to deliberate on four key areas: easing of reauthorization regulations, recalibration of broadcast transmission fees, strengthening of T-commerce regulations, and approval for new channels.

Industry sources cite Gongyoung Home Shopping and Home & Shopping as leading contenders for the new T-commerce license. Among the seven home shopping networks — GS Shop, CJ OnStyle, Lotte Home Shopping, Hyundai Home Shopping, NS Home Shopping, Gongyoung Home Shopping, and Home & Shopping — only these two lack T-commerce licenses. Given their existing broadcasting infrastructure and production capabilities, they are considered well-positioned to expand into T-commerce alongside their main channels.

Gongyoung Home Shopping, in particular, could leverage the initiative to expand staffing and operations, while Home & Shopping could gain momentum for its long-anticipated initial public offering (IPO) — a key objective for Kim Ki-moon, Chairman of the Korea Federation of SMEs (KBIZ). Both companies also carry a strong mandate for “SME exclusivity”: Gongyoung Home Shopping operates under the Ministry of SMEs and Startups, and KBIZ holds a 32.83% stake in Home & Shopping. As Gongyoung Home Shopping sells 100% SME products and Home & Shopping 80%, industry observers say running a dedicated SME T-commerce channel would impose minimal operational strain.

New Opportunities for SMEs Facing Distribution Challenges

Experts largely agree on the policy’s intent to expand market access for small merchants and SMEs. With domestic consumer sentiment weakening for an extended period, the need to strengthen SME distribution support has grown more pressing. The launch of a new T-commerce channel could offer substantial benefits by widening SME exposure and encouraging small merchants to develop more competitive products as their sales opportunities expand.

According to KBIZ, 87.1% of SMEs surveyed supported the introduction of a new SME-exclusive T-commerce channel. Moreover, 80.5% of respondents said more than two such channels should be established, signaling a strong preference for greater market diversification. Their reasons included: “limited competitive stimulus from only one operator” (31.2%), “enhanced promotional and sales opportunities” (28.7%), and “greater choice for participating firms to compare and select platforms” (22.0%).

An SME representative noted, “T-commerce allows 24-hour sales through pre-recorded broadcasts and doesn’t require large inventories, making it a relatively accessible sales avenue for resource-constrained SMEs and small merchants. With TMON and Wemakeprice — once major SME retail platforms — now gone, the need for alternative sales channels has become even more urgent.”

‘Just Dividing the Pie’: Economic Viability in Doubt

However, skepticism dominates the market and existing home shopping sector. Critics argue that adding another T-commerce channel in an already saturated market will not create new demand. Questions also persist over whether SME-dedicated T-commerce operators possess the content capabilities to satisfy increasingly demanding consumers.

Product sourcing is another concern. With only a limited number of SMEs able to supply home shopping products, more channels could result in repetitive listings of the same items, increasing inventory and production burdens while discouraging participation. Already, SMEs account for around 70% of total product airtime across major home shopping networks. A home shopping industry official cautioned, “If the industry downturn deepens, funding shortages could ripple through to content producers, shrinking the entire ecosystem.”

Critics further warn that excessive competition could ultimately erode overall sales. The home shopping industry is already mired in stagnation. Combined sales for five T-commerce operators — SK Stoa, KT Alpha Shopping, Shinsegae Live Shopping, W Shopping, and TRN — fell 1.6% in 2024 to $9.1 billion, compared to two years earlier. Traditional home shopping networks also saw revenues decline by 5.1% to $41.8 billion over the same period.

Television viewership continues to fall. The Korea Communications Commission reported that only 69.1% of viewers watched TV at least five days a week — the first time that figure has dropped below 70% since tracking began. Against this backdrop, SK Telecom’s plan to sell its top-ranked T-commerce unit, SK Stoa, underscores that home shopping is no longer viewed as a growth industry. The latest valuation for SK Stoa is between $740 million and $1.5 billion — far below its 2024 annual sales of $2.2 billion. This contrasts sharply with the 2006 sale of Woori Home Shopping (now Lotte Home Shopping), when Lotte Shopping and Taekwang Industrial competed for acquisition, and Lotte’s 53% stake purchase alone was valued at $3.4 billion, despite Woori Home Shopping’s revenue then standing at $1.8 billion.

Observers also warn that smaller merchants could be sidelined in the channel selection process, undermining the policy’s intent. Even if launched, the new T-commerce platform is likely to favor mid-sized companies or larger SMEs with proven sales performance, leaving truly small merchants in the margins. Moreover, maintaining current regulations — such as mandatory SME airtime quotas and T-commerce-specific screen-size restrictions — while merely adding more channels could further accelerate the industry’s decline. Without first addressing stagnation in the home shopping sector, a well-intentioned initiative risks pushing the entire industry toward collective collapse.