Mr. Wang: The company was established in 1998, and in the last 11 years we have been growing at a very fast rate. In the past six years, we were ranked consistently as the number one TV direct sales company in terms of sales volume and advertising airtime by third-party researchers. Our major business model is to develop and incubate new products, new services and new brands. We create brands, develop the products, and market and distribute them through our channels. We sell both proprietary and third-party products on our platform. Thus far, we have been selling all types of products, primarily student-related products, medical devices, health care devices, cosmetics, electronic devices and GPS electronic devices, etc.
TWST: Give us an idea of the size and growth potential of the markets that you serve.
Mr. Wang: As of now, TV direct sales business is roughly about 10 billion RMB in China, which is roughly 1.5 billion. As a percentage of retail sales, that's roughly 0.1%. In the United States, TV direct sales, as a percentage of retail sales, is approximately 8%, according to third-party research. In Korea that number stands around 5%. As you may know, general retail sales in China have been growing at a double-digit rate, meaning there is tremendous room for growth for TV direct sales, both in absolute terms and as a percentage of total retail sales. TV direct sales still lacks in market share in China because most consumers still aren't familiar with this format of shopping. This means that in addition to continued retail sales growth of 20% to 30% for the past few years as well as in the next few years, China should experience a shift towards direct TV sales, catalog sales and other direct sales channels.
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