Interview: TV Direct Plc (TVD)

Note: This will be the second last¬†Company Interview in the Bangkok Post as, after 9 years, they’ve decided to discontinue publishing them. Together with ShareInvestor we are still figuring out what avenues/channels are best to use in the future, so until then we may not be publishing any new interviews…which is a shame.

TV Direct tunes in to more sales channels

TV Direct Plc (TVD), Thailand’s first TV shopping business, listed on the Market for Alternative Investment in August 2012. Yuvaboon Khamwangyang, director of the management committee, discusses the company’s strategy and outlook.

tvd

Mr Yuvaboon says he aims to strengthen TVD’s multi-screen model.

Please explain the history of TVD.

TVD was the first company to start selling products on television 17 years ago. At the time the concept was new and we started with direct-response TV (DRTV), buying media time from the free TV channels 3, 5, 7 and 9. We advertised sports and fitness products, demonstrating how they worked and their benefits and inviting interested people to contact our call centre to order.

In the first few years we saw tremendous growth, both from the two-minute promotional format and from the 30-minute format that featured full product demonstrations with a focus on the products’ health benefits and not just the brand. We have been expanding ever since and have become a publicly listed company as we continue to see vast opportunities within Thailand.

What is TVD’s business model today?

We launched our new “multi-screen” business model last year with three categories: direct, online and retail shopping. Direct Shopping encompasses multiple segments including DRTV, infomercials, three satellite TV channels, direct response print (a monthly catalogue sent to customers and partnerships with credit-card companies), and an outbound call centre that alerts customers about new products, promotions and campaigns.

Online Shopping is a key category we have been expanding since last year as there is a shift to more mobile and online viewing. Thus we have our website, mobile applications, microsites dedicated to specific brands or products, social marketing and a marketplace where we sell our products on other e-commerce platforms.

Finally, our Retail Shopping business has 72 TV Direct Showcase locations throughout the country. We also have brand outlets as we are exclusive distributors for brands in lingerie and sunglasses, plus wholesale and caravan sales. In total we manage 60,000 orders per month within these three groups.

What products does TVD currently sell and who are your target customers?

We have a broad portfolio that includes fitness and sports, home and living, supplements and beauty, and lifestyle products. Our customer groups vary. For example, the average age of our online customers is under 30 while other channels attract older buyers. The majority of our sales, close to 60%, come from outside of Bangkok.

How does TVD manage its inventory?

The inventory life cycle starts with the selection of the product, at which point our in-house production team begins show production. Then we decide which distribution channel, the timing and target customers for the product in our Direct Shopping group. When we see the product decreasing in popularity we shift it to the Online Shopping group offering additional promotions, and from there it will reach the Retail Shopping group to ensure that we clear out the inventory.

We offer next-day delivery throughout Thailand including as far north as Chiang Rai and as far south as Pattani, as we have improved our last-mile delivery. Today we have one main warehouse, 35 hubs throughout the country, with over 90% of deliveries handled in-house.

TVD’s financial performance has improved recently. What are the reasons for this?

Last year we ended investments in international subsidiaries, realised the losses and provisioned for future losses and damage to inventory, so that we could refocus purely on the Thailand market.

Furthermore, we improved our operations internally by reducing the cancellation rate, which had peaked at 18%, to 11% today. As well, business process re-engineering has helped us shorten turnaround times throughout our operations, allowing us to optimise cost efficiency as a group using a shared-services model managed by our subsidiary TVD Services. Finally, we improved our sales by optimising our sales formats, focusing on product mix and product value rather than sales promotion.

Last year you announced a joint venture with Momo. How is it progressing?

Momo is the largest TV shopping player in Taiwan and has a strong online presence as well. Together we are using one of our licences for a 24-hour Home Shopping TV channel. This JV has been a remarkable success as it combines our local market knowledge with Momo’s expertise and it has been profitable since the first year. Currently the model is consignment only and is already selling more than 60,000 orders per month.

Where do you see TVD five years from now?

Today we oversee close to 130,000 orders sold per month and expect to see this figure continue growing as we continue to strengthen our model. We have built a strong foundation and infrastructure in-house and we aim to continue strengthening the multi-screen model as we expect a continued shift from TV to online.

In addition to this, we have a customer base of 3 million people, and technology now allows us to improve targeted marketing, making us even more efficient with each channel that we use to sell our products.

Source: Bangkok Post

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