BUSINESS

CJ O Shopping makes foray into media commerce with CJ E&M merger

By Kim Da-sol
  • Published : Jan 18, 2018 - 18:19
  • Updated : Jan 18, 2018 - 18:19
With the latest announcement of a merger with the media arm of the group, CJ O Shopping, South Korea’s largest home shopping company by revenue, is expected to make a foray into media-converged commerce and wider overseas markets.

CJ O Shopping

CJ O Shopping on Wednesday announced it will merge with CJ E&M, with the finalization slated for Aug. 1 after the plan earns approval at a general meeting of shareholders in June. 

CJ O Shopping is CJ Group’s home shopping network and has top sales in the industry. CJ E&M owns television channels such as tvN, Mnet and OCN, and also runs entertainment businesses. 

The two companies will merge at a 1:0.41 ratio, aiming to raise 4.4 trillion won ($4.1 billion) in sales and operating profit of 350 billion won by the end of this year. It plans to achieve sales growth of 15.1 percent annually by 2021.

Last year, CJ O Shopping recorded 2.2 trillion won in sales with operating profit of 178.8 billion won. CJ E&M recorded 1.5 trillion won in sales with 27.9 billion won of operating profit. 

Whether CJ O Shopping will keep its name following the merger has not been decided, according to the company. 

A major backdrop for the merger is a global trend of convergence of media and commerce, the company said.

“China’s e-commerce giant Alibaba recently acquired shares in Steven Spielberg’s Amblin Partners to produce, finance and distribute movies. Amazon also plans to expand its content service,” the companies said in a joint statement. 

CJ O Shopping also cited rapidly changing media consumption patterns. Increasingly, consumers watch shows and made-for-mobile videos online rather than on television. 

CJ expects the two companies’ accumulated consumer data -- CJ O Shopping in commerce and CJ E&M on television and online -- will lead to synergies, it said.

CJ O Shopping’s expertise lies in merchandising and product planning, while CJ E&M specializes in content creation for television and online channels. 

Both companies plan to push for expansion of overseas business. CJ O Shopping first tapped the Chinese market in 2004 and expanded its overseas foothold in Southeast Asian countries including the Philippines and Malaysia. CJ E&M has entered overseas markets including Vietnam, Thailand and Turkey. 

By Kim Da-sol (ddd@heraldcorp.com)