A Hike in QVC's Online Sales


QVC, the home shopping TV channel of Liberty Interactive Corp. (LINTA), is benefiting from the surge in online sales. Management stated that its online sales will constitute more than 50% of the total revenue in the U.S. by 2014. The major thrust comes from the growing adoption of high-end smartphones in the U.S. QVC is about to introduce a synchronized content for its mobile applications. This feature will enable smartphone users to get real time information about a product which is broadcast on the TV show. This will promote online sales further.

According to a report of Internet Retailer, after Amazon.com Inc. (AMZN), QVC was the second-largest e-commerce retailer in the U.S. in 2012. QVC has become the market leader in the $8 billion TV home-shopping business commanding an estimated 69% market share, far ahead of its nearest rivals, HSN Inc. (HSNI) and ValueVision Media Inc. (VVTV). The TV home-shopping business has a stable customer base, generally constituted of women.

Liberty Interactive’s Internet operations are primary growth engines. We expect QVC to continue leveraging its brand to rapidly grow its Internet operations. Exposure to international markets such as Japan, Germany, Italy, and the U.K. will enable QVC to achieve a high rate of growth. QVC is gradually expanding its presence in these developed markets.

QVC entered into a definitive agreement to form a joint venture with China National Radio (CNR), the government controlled radio division of China. The joint venture is known as “CNR Home Shopping Co. Ltd.”  QVC holds a 49% stake of this venture and China National Radio controls the remaining 51%. The joint venture will aggressively operate a multimedia retailing business in China. Liberty Interactive currently has a Zacks Rank #3 (Hold).

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