Liberty Interactive Corp.
(
LINTA
) is diversifying its businesses globally. The company's TV and
online retail segment, QVC Inc., recently entered into a definitive
agreement to form a joint venture with China National Radio (
CNR
), the government controlled radio division of China.
The joint venture will be known as "CNR Home Shopping Co., Ltd."
QVC will hold 49% stake and China National Radio will control
the remaining 51% share. However, the financial terms of this
venture is still undisclosed.
Around 35 million Chinese households watch China National
Radio's own home shopping TV channel, CNR Mall TV. The joint
venture will further aggressively operate a multimedia retailing
business in China through CNR Mall TV and its e-commerce website.
At present, QVC's programming is distributed to approximately 195
million homes worldwide.
Excluding the U.S., the company already has presence in the
U.K., Germany, Japan, and Italy. Currently, the company is trying
to extensively penetrate highly lucrative and large Chinese market.
In future, QVC will try to enter other emerging markets, such as
India and Brazil besides entering into France and Spain.
Liberty Interactive's QVC division has become the undisputed
market leader in the $8 billion TV home-shopping business.
Currently, QVC commands an estimated 69% market share, far ahead of
its nearest rivals,
HSN Inc.
(
HSNI
) and
ValueVision Media Inc.
(
VVTV
). In the previous quarter, QVC segment generated a total revenue
of $2,649 million, of which nearly one third came from its
international operations. The company is expecting this figure to
reach 50% by next 5 years.
Liberty Interactive's Internet operations are a primary growth
engine. We expect QVC to continue leveraging its brand to rapidly
grow its Internet operations. This segment currently generates
approximately 87% of the company's total revenue and 96% of profit.
Exposure to a large emerging market, such as China will enable QVC
to achieve a high rate of growth in future.
HSN INC (
HSNI
): Free Stock Analysis Report
LIBERTY M INT-A (
LINTA
): Free Stock Analysis Report
VALUEVISION CLA (
VVTV
): Free Stock Analysis Report
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