Thanks to the merger announced Thursday between QVC and HSN Inc. (best known as direct-to-consumer broadcast retailers), the combined company will be No. 1 in global video commerce with $14 billion in revenue, will reach more than 360 million homes via 17 broadcast networks and broadcast more than 145 hours of live content per day, the companies said in a presentation to shareholders Thursday.
That will also make it the No. 3 company (behind Amazon and Walmart) in e-commerce and mobile commerce, executives said, with $7.5 billion in online sales and $4.7 billion in mobile commerce revenue, according to the presentation.
The merger is a consolidation of two major players in what is now a waning television-based shopping segment. Beyond that, it is also an opportunity to create synergies and combine forces to push into e-commerce (including mobile) in a significant way.
There’s very little that’s surprising about this merger. Once fierce rivals, QVC and HSN have good reasons to join forces. For one thing, QVC-owner Liberty Interactive already owned 38.2% of HSNi.
Plus, interactive broadcast retail has already shifted in a major way from television sets to the web. With that, and an aging consumer base, the time was ripe for the two to come together and plot a course to grow online sales, particularly on mobile.
The new company could have far-reaching consequences for the e-commerce landscape. That’s especially true for Amazon and Walmart, which increasingly rely on their marketplaces (and third-party sellers) for sales. Half of the merchandise sold on Amazon comes from its marketplace, and Walmart’s own fast-growing marketplace contributed to the e-commerce sales spike of 63% and attendant 69% digital gross merchandise volume increase in its most recent quarter.
“The news on the QVC/HSN merge just sent ripples throughout the direct response and e-commerce space — ripples that are especially being felt by Amazon and Walmart as a finalized merger would position QVC/HSN as the third largest e-commerce company in North America,” said A.J. Khubani, founder of BulbHead.com and founder/CEO of "As Seen On TV" products company TeleBrands, told Retail Dive in an email. “There’s one thing for certain — it’s only a matter of time before those ripples become waves.”
Those ripples and waves depend on innovation, but considering the synergies the merger will provide and a business ripe for new ventures, Khubani said to expect it.
“We’re living in an era where the long-term sustainability of direct response and home shopping are being contested, but this is exactly the type of ‘all in’ move the industry needs,” he said. “As a direct response pioneer of over 30 years myself, we’re constantly adapting and innovating based on consumer trends, and making amazing strides. However, with a merger of this scale, you should expect to see groundbreaking innovation across television-enabled commerce and entirely novel shopping experiences to capture the modern consumer.”