QVC Debuts in Japan, Expands in Germany

First-month sales for QVC-J, QVC's joint venture in Japan with Mitsui Corp., were “more than our target numbers,” said Hayashi Sasaki, president of QVC-J.

He declined to disclose figures but said May sales were 30 percent over budget.

QVC's entry into Japan follows the Home Shopping Network's success with the Jupiter Shop Channel, a joint venture with Sumitomo Corp., one of Japan's largest trading companies.

Mitsui had tried a home shopping channel on its own but found it was “no serious competitor” for the Jupiter Shop, one veteran Japanese executive said. “But now with QVC, Mitsui has become a player,” the executive said.

Last year Mitsui closed its shopping channel, which had been lagging behind Jupiter since it opened in 1996. The joint venture with QVC included 5 billion yen ($41 million) in start-up money and another 2 billion yen (about $16 million) last month.

Sasaki said QVC-J should break even on sales of 20 billion yen (about $162 million) annually.

Jupiter Shop executives said the entry of QVC-J had not hurt sales. Jupiter started in 1996 when there was no noteworthy competition. HSN know-how helped the company survive other short-lived competitors that could not keep up the heavy investment pace and were hurt by general softness that resulted from Japan's economic woes.

Jupiter tends to sell domestic products, and last year's sales totaled 13 billion yen (about $107 million), enough to give the company its first profitable year since beginning.

QVC also continues to expand in Germany. It opened its first retail store in Germany last month and decided to base its second German call center, which will open in October, in Kassel.

The retail outlet is in Hueckelhoven, a town in North Rhine-Westphalia, Germany's largest state.

The store features a representative cross-section of goods shown on TV at competitive retail prices, including jewelry, kitchenware and automotive products, spokeswoman Caroline Bierman said.

The new call center in Kassel will be operational in October to handle orders from the northern part of the state of Hesse. Initially QVC will rent facilities with room for 60 workstations and 300 agents.

“We plan to find a permanent home for an expanded call center eventually with 300 workstations,” said Francis Edwards, QVC's boss in Germany, “and that would add 1,000 jobs.”

The company gets state support because it is viewed as a job-creation engine.

QVC still lags behind H.O.T., a German shopping channel in which HSN has a substantial interest, but it managed to boost sales in 2000 to DM 290 million ($142 million), a 60 percent increase from 1999.

The number of customers grew tenfold since the start to a total of 1.25 million.

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