S. KOREAN HOME SHOPPING CHANNELS MAKING INROADS IN CHINA.

SEOUL, April 1 Asia Pulse - South Korean home shopping channels are turning to the Chinese market for a new source of cash as the growth of their domestic operations no longer seems as promising as they used to be.

The local TV home shopping industry, which once enjoyed rapid annual growth of several hundred per cent due largely to a growing number of subscribers to cable TV channels, has recently gone into the doldrums amid stagnant consumer spending.

LG Home Shopping (KOSDAQ:028150), South Korea's first and largest home shopping channel, saw its net profit decrease 64.1 per cent to 19.6 billion won (US$17 million) last year on sales of 1.6 trillion won, according to industry statistics.

CJ Home Shopping (KOSDAQ:035760), a subsidiary of food and entertainment giant CJ Corp., also recorded a net profit of 31.3 billion won last year, down 29.9 per cent from the previous year.

It was the first time for both of the leading firms to record negative growth since they were launched in the mid-90s.

"The TV home shopping market has become almost saturated and it is hard to expect any more than 5 per cent annual growth," Song Kye-sun, a senior analyst at Dongwon Securities, said. "There is also too much competition in the industry and it will be very difficult for home shopping companies to expect any dramatic rebound in profit."

There are five TV home shopping companies in South Korea and market analysts share the view that the local market, with less than 10 million cable TV subscribers, is just too small for the five companies.