Network18-owned TV selling unit HomeShop18 is acquiring 74% stake in Shop CJ Network as private equity investor Providence Equity Partners is exiting from the venture. Shop CJ was earlier known as Star CJ and was a joint venture between equity investor Providence Equity Partners and Korean firm CJ O Shopping.
According to the Economic Times report, Network18 is expected to clinch the deal in tune of Rs 180-200 crore. It’s expected to announce later this week.
Shop CJ and other TV selling platforms had failed to cope-up with fallouts of demonetisation. TV selling platform Best Deal TV promoted by celebrity Shilpa Shetty and Raj Kundra ceased operation last year citing cash crunch last year.
To cut losses and consolidate operations, Shop CJ had shut its Tamil home shopping channel. The report also hints that company will wind-up Mumbai operation and centralised command from Delhi office.
Launched in 2009 Star CJ was a joint venture between Star India and South Korea-based CJO shopping. Later, Star sold its 50% stake to Providence Equity Partners for $63 million.
Currently, India’s home shopping market is worth about Rs 4,000 crore. It had undergone massive setback last year after demonetisation as home shopping is largely driven by Cash on Delivery (CoD).
Earlier in March this year, Snapdeal had exited from DEN Snapdeal TV-shop, a joint venture forged between Softbank-funded Snapdeal and DEN Network. At the time of launch in 2014, the idea behind the joint venture was to leverage Snapdeal’s brand, merchandising and logistics besides using DEN’s strengths in distribution and media.
Post demonetisation, home shopping space has been struggling as a major chunk of business for HomeShop18, Star CJ and Naaptol among others hail from non-metro cities. Shoppers on TV channels largely use cash as a payment option. However, cash crunch triggered by demonetisation caused a slowdown in the growth of home shopping space.