GS Shop is accelerating its push into private brands, drawing on nearly three decades of sales data and customer spending patterns. The home shopping operator is using product differentiation to sharpen its competitive edge while shoring up profitability.
The company's "Heriden 100% Wool Bedding Set," which can be boiled for washing and launched early this month, sold out during its broadcast with about 2,900 sets purchased, industry sources said on the 19th. Orders totaled 920 million won ($640,000), roughly 150% of the company's initial target.
Heriden is GS Shop's own bedding brand, developed over about a year of planning and product work, and the broadcast marked its first appearance before consumers. The company moved into in-house development after bedding orders jumped to about 33 billion won last year from 8 billion won a year earlier, more than tripling as the market expanded.
GS Shop paid particular attention to rising consumer demand for premium bedding, with wool products accounting for about 40% of total bedding orders. During development, the company surveyed more than 3,000 customers and incorporated their requests on materials, functionality and ease of washing.
The Heriden launch broadens GS Shop's private brand portfolio to four. The bedding line joins VU in beauty, Simple Bio in health supplements and Barosseum in household goods.
Existing private brands are also growing quickly. Cumulative orders for VU in the first three quarters of this year surged 470% from a year earlier. Simple Bio orders rose 324% over the same period, while the number of customers placing orders increased 163%.
The strategy of strengthening private brands and exclusive products is feeding through to earnings. GS Shop posted second-quarter operating profit of 26.7 billion won, up 6.0% from a year earlier. Operating profit has risen for three straight quarters, from the fourth quarter of last year through the second quarter of this year.
Industry analysts point to a 46% year-on-year increase in the number of exclusive products, centered on fashion, beauty and living goods, as a key driver of the improvement. Exclusive products are seen as better suited than standard merchandise to differentiation and margin gains.
"Home shopping companies are using sales information and customer purchase data accumulated over many years to strengthen product competitiveness," an industry official said. "Efforts to identify products with strong growth potential and to build up private brands are expected to continue."