Astro Doubles Go Shop Revenue Goals
Aiming for RM1 billion in turnover by 2019.
Astro has doubled the revenue targets for Go Shop, its home shopping business, to RM1 billion (US$256 million) in turnover by end-2019, up from RM500 million set at launch just under two years ago.
Since then, home shopping and ecommerce has emerged as a promising growth engine for Astro, offsetting tepid-to-flat performance in pay-TV subscription, the company’s main source of income.
The home shopping unit is run as a JV, 60% owned by Astro, Malaysia’s largest media company, with 40% belonging to Korean home shopping specialist GS.
A new Mandarin-language home shopping service for Singapore’s StarHub – leveraging Astro’s existing facilities for production, payment and customer service – went live at the end of November, targeting ~200,000 customers in its first year of operation.
That’s a one-off, at least for now, with no immediate plans to enter other markets or add more languages in Singapore. All the same, it’s another show of confidence in Go Shop’s capabilities.
At home, Go Shop is ratcheting up investment in production while widening its product range to sustain its momentum.
Reaching its ambitious new target – which includes Ebitda margins somewhere in the mid-to-low teens – means attracting a lot more customers, while implementing continuous improvements to the service.
The unit registered RM138 million revenues, or ~5% of total group turnover, for the first half of Astro’s latest financial year. The figure reflected an 87% Y/Y revenue jump, largely due to the addition of a Mandarin channel in November 2015.
Plans for an Indian channel, however, have been shelved.
Meanwhile, a competitor offering from Malaysian broadcaster and publisher Media Prima went live in April this year, amassing almost RM40 million (US$10.3 million) in net revenue in its seven months of operation.
Nonetheless, Malaysia’s overall ecommerce market is forecast to surge forwards at a double-digit CAGR for the foreseeable future.
For Go Shop’s CEO Grace Lee, the main challenges facing ecommerce players are the distribution network and delivery, prompting Astro to focus on maintaining its logistics network, payment gateways and retailing know-how.
“Go Shop will focus on growing its customer base to 1 million registered customers, widening the variety of products across categories and introducing products at different price points to cater to our different customer segments,” Lee tells Media Business Asia.