Openshop: Hyundai's $45m Australian home-shopping bet folded in two years

The Australian Shopping Network, operating as Openshop, launched on August 1, 2019 — a home-shopping channel established by South Korea's Hyundai Home Shopping, a live-commerce pioneer looking to test Australia's market, with sales segments streamed on 7Plus and the Seven Network in major capital cities. The Korea Herald reported a $45 million investment in the venture. Managing director Jason Kim called Australia 'an advanced, digital-ready economy' showing huge growth in online shopping, and the channel was promoted on the NSW government website as expected to create 130 jobs.

Less than a year in, Openshop began writing to the Australian Competition and Consumer Commission: incumbent TVSN, Australia's biggest home-shopping player with more than 20 years' running, had lodged two exclusive dealing notifications giving it exclusive access to products and the ability to refuse products that appeared on a competitor's channel before or during an appearance on its own network.

Openshop told the ACCC the provisions would hit competition and make it difficult to compete against TVSN; broadcasters Nine Entertainment and Seven communicated the same concerns. The watchdog decided not to object — on July 16, 2021 it said it was satisfied the conduct would not lessen competition.

Three weeks later, on August 6, 2021, Openshop went into administration, two years after launch. ASIC filings showed about $120,000 owed to employees, almost $1 million owed to Seven and $12 million owed to Hyundai Home Shopping. The channel was still being broadcast live on 7Plus as the collapse was reported.

It entered a market with one entrenched 20-year incumbent and no answer to that incumbent locking up product supply exclusively.

The regulatory path it bet on — an ACCC objection to TVSN's exclusive dealing — closed on July 16, 2021.

The $45m invested, per Korea Herald reporting at launch, bought two years of runway and no defensible position.

A second-mover needs a competitive path before launch: if the incumbent can lock up products exclusively and the regulator won't intervene, the market was never open.

Administrators took over The Australian Shopping Network with Seven owed almost $1 million and the Korean parent $12 million; employees were owed about $120,000. Seven and The Australian Shopping Network were unavailable for comment.