QVC looks beyond TV and U.S. for growth
NEW YORK, Sept 9 - QVC is testing same-day shipping in Japan and is "actively looking" to enter new countries, efforts that should help the television shopping channel get 50 percent of its sales from outside the United States in the long run, its chief executive said on Monday.
QVC, owned by Liberty Interactive Corp, is best known for its cable television channel, where it sells everything from kitchen appliances to handbags.
The company gets about 35 percent of its sales from international markets, a percentage that should rise to over 40 percent in five years and to about 50 percent over the longer term, President and CEO Mike George said at the Reuters Global Consumer and Retail Summit.
Currently, QVC operates in the United States, the United Kingdom, Germany, Italy, Japan and China. It is "actively looking" for new markets to enter, which may include Brazil, Mexico, France and Spain, he said, speaking at Reuters office in New York.
France and Spain are "high on the list" of places to expand in Europe despite a gloomy economy, George said. The CEO is also "intrigued" by Turkey and sees an opportunity to enter India over the long term, though infrastructure and regulatory hurdles make it hard to enter India, he added.
QVC started to test same-day delivery in densely populated Japan this month, a market where such service is more common than in the United States, QVC's largest market. It takes roughly two to three days for orders to be delivered on the U.S. East Coast compared with five to six days on the West Coast, where the company does not have a distribution center.
Like other retailers, QVC is seeing rapid growth as shoppers make purchases on their computers, tablets and mobile phones. E-commerce accounted for 42 percent of QVC's U.S. revenue in the second quarter of 2013, up from 39 percent in the second quarter of 2012, and 35 percent in the second quarter of 2011.
E-commerce accounted for 37 percent of QVC's total revenue in the second quarter. QVC should get at least 50 percent of its sales online by the end of 2014, George said.
The company's "Christmas in July" event led to about $50 million in sales, above the prior year and ahead of the company's plans, George said. That two-day event is "a good gauge, not a perfect gauge," of shopping patterns heading into the holidays, he said.
Investors in Liberty Interactive Group LINTA.O, the tracking stock for some of the properties owned by Liberty Interactive Corp, benefit from QVC's growth, George said. QVC makes up "over 90 percent of profit and 80 percent of market cap" of the stock, he said.
The stock includes Liberty Interactive's other investments such as a stake in QVC's rival, HSN.
George added that over the past few years investors have been looking for a way to make a "pure play" investment in QVC.
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