As if there wasn’t enough drama around Ricky Wong and Hong Kong Television Network. Now the network and its chairman are planning to pair TV programming with e-commerce, offering high-spending shoppers at a new online mall access to over 1,000 hours of HKTV shows.
It’s just the latest twist in the company’s long-running business saga after the government denied it a free-to-air license last year and poured cold water on its plans for mobile television.
Market watchers say this too will be another uphill battle for Wong, given Hong Kong’s culture of shopping on the street and lack of faith in online retailers. To succeed, Wong may need to ground consumer confidence in top-of-the-class logistics and after-sales service.
There have long been doubts about whether Hong Kong is fertile ground for online shopping businesses, given the high density of malls that puts consumers within easy physical reach of retail outlets.
HKTV is answering the doubters with a whole new business model that it thinks will get the public hooked. Wong’s idea is that shoppers will be able to watch the first two or three episodes of a series for free but will only be able to watch the rest when they’ve spent a certain amount at the online cash register.
The business model is very simple. HKTV will offer merchants free online space to sell their products and HKTV will take a double-digit percentage of each order. That could make the products cheaper online than in chain stores because chain stores usually charge slotting fees to put lines on their shelves.
If so, that could trigger a reaction from the chains which are controlled by big conglomerates. They could put pressure on suppliers not to do business with Wong, one of the lessons Next Media chairman Jimmy Lai learned 14 years ago when his adMart online shopping mall collapsed.
Wong’s is an untested approach so who knows if it will work. But whatever spending formula HKTV goes for, success will no doubt rest on the quality of the content.
Some of HKTV’s dramas are already available on YouTube for free. One of the hottest programs is Police Boundaries, which has drawn more than 1.5 million views since it was posted on the video site just under a year ago. If 20 percent of those viewers became shoppers, HKTV would have 300,000 people buying products. Assuming each order was HK$1,000 for each user per month, the assumed gross merchandise value could be HK$300 million per month, translating to a HK$30 million 10 percent monthly cut for HKTV.
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