THINGS are getting decidedly dirty in the Wonderclean world of home shopping commercials. To Peter Lee, managing director of Interwood Marketing, the company which first launched DidiSeven on an unsuspecting Hong Kong in January 1994, his competitor TV Media is the stubborn stain that just won't go away. Lee has seen his market share shrink to less than 20 per cent since TV Media was launched in October 1994 and claims the company has been ripping off his patented products.
'We're very unhappy with them,' says Lee. 'We spend a lot of money on research and development and as soon as they find out our product sells, they copy us. We have an original product called the Contour Pillow and they bring in a product called Comfort Pillow! Their Sumi knives are a complete knock-off of my Ginsu knives. Their creative is the same - a Japanese chef demonstrates the knives, but they try and be smart by adding a Chinese chopper.' Lee feels TV Media's products have put the direct response television (DRT) industry into disrepute. 'The price is far cheaper but the quality's far worse. The consumer doesn't know the difference if you blast it on TV day in, day out. But TV Media would have received a lot of returns. If you deal with inferior products you're definitely going to get a higher percentage of returns. It puts [people] off the industry.' While Lee is openly scathing of his competitor, TV Media's managing director, Nelson Tan, is altogether more placatory. Tan claims to be on friendly terms with Lee and praises Interwood for its reputation in the industry. As for Lee's assertions of 'inferior products' and high rates of return, Tan says, 'Our percentage of returns is less than one per cent. He probably made those comments because our prices are lower than his. Because our prices are lower he may perceive the quality as being lower, but that's not true.' He jokes about the fact that Sumi knives sounds surprisingly like 'sue me' and blames his suppliers for the similarity of their goods to Interwood's. 'One product comes out and 10 or 20 similar products come out at the same time. The market's big enough for them all. And Interwood runs similar products to us. When we stopped running Knitting Mate they started running Knitting Pal.' He maintains the competition has benefitted Interwood, bringing public awareness to the concept of DRT shopping. 'We're friendly competitors,' says Tan. 'We have captured 80 per cent of the market share but we also took up 80 per cent of the airtime. So Interwood is still doing the same business as when they started. We've just made the pie bigger.' TV Media claims to have sold 200,000 of its best-selling item, the Abdominizer, whereas Interwood claims to have sold 30,000 of its best-selling product, DidiSeven. The ratio is almost identical to the 80 per cent market share Tan claims to have captured.
'He's a lot of crap,' responds Lee half-jokingly. 'He claims a lot. OK, let's put this into perspective. TV Media came in with a very big bang, that's TV Media's style. In 1995 they spent a great deal of money, X zillion dollars in buying airtime. They generated a lot of exposure compared to us. They created a lot of awareness, but if you look carefully now they're almost non-existent. We've maintained the same [presence] but they were, bang, and then out. In this industry it's how long you survive that shows you're doing it correctly. It's how steady you are, what kind of reputation you have, how firmly you stand behind your goods. All this is important for the long term. If not, you make your money and run.' Interwood Marketing was the first to bring the concept of DRT shopping to Hong Kong's terrestrial screens in January 1994 (remember DidiSeven and the TopsyTail?). Formed in Toronto 22 years ago, Interwood is now the largest DRT company in the world, operating in 107 countries. It was followed onto Hong Kong screens by K-Tel in August 1994, but the local agent folded a year later due to disappointing sales. Says Mark Amdur, the former managing partner of K-Tel (Hong Kong), on reflection: 'We didn't see the results. The potential for DRTV in Hong Kong is not great - it isn't a big enough market and traditional gimmicky kitchen and DIY products don't fit in. There's not a lot of DIY and people cook Chinese food. They don't make chips.' Lee, however, believes it was more a case of inexperience. 'He had the K-Tel name but he was just an agent. The problem with agents is they don't get the support from the parent company. A person who's new to this industry would find it difficult to cope.' TV Media followed four months after K-Tel in October 1994. The Hong Kong operation was the first branch of the Singapore-based company founded earlier that year by Tan and his New Zealand partner, Bob Robertson. Their ambition was to create an Asia-wide network, and in 1995 TV Media launched in a further nine Asian countries. 'We have no intention of moving into the Middle East or North America,' Tan says. 'We know where we are. We want to build our network in Asia and the Pacific Rim. Unlike us, Interwood are more wholesalers. We get into countries, set up our own thing, take our own phone calls. We want to build a network.' With an estimated 70 million TV sets, China is seen by both companies as the most lucrative potential market and both are vying for the biggest slice of pie. Interwood has had a China distributor since last December and TV Media hopes to set up there in early '97. 'There's a lot to do,' Tan says. 'We need warehouses, convenient pick-up places, a good telephone system. We need one phone room in China to pick up calls from all over, like the big ones in Nebraska or Utah with 5,000 telemarketers at a time.
It's going to be immense.' TV Media has huge expansion plans for 1997, including a chain of retail outlets in Hong Kong similar to the seven already operating in Singapore. Products and commercials targeted specifically at the local market are also in the pipeline. 'We want to cater to Asian flavours and design uniquely Asian products; Chinese chess or mahjong, for instance. Or take good ideas and localise them,' Tan says. There are also plans to use the company's database for other forms of direct marketing. So if you've bought something from TV Media recently, prepare to be bombarded with pamphlets, catalogues and mail from credit card syndications.
But that's not all. TV Media hopes to bring half-hour 'infomercials' to Hong Kong screens. Currently the company broadcasts 140 hours of these long-form commercials in Taiwan, Singapore, Malaysia and Indonesia. But Hong Kong's Television and Entertainment Licensing Authority (TELA) restricts the length of infomercials or 'ad magazines' to 15 minutes for broadcast on Hong Kong terrestrial and satellite television. Each licensee is currently only allowed to air two a week. TV Media wants to run them twice a day and is lobbying the Hong Kong Broadcasting Authority for deregulation.
Fortunately, the half-hour infomercials aren't as mundane as one might expect. Rather than 30 minutes of the wonders of Wonderclean, the ads have a talk-show format. The Mega Memory, a memory improvement course, for instance, is advertised on The Danny Bonaduce Show, a second-rate version of such American institutions as The David Letterman Show, complete with visual gags, house bands and an ecstatic studio audience. (Bonaduce is hardly of similar celebrity stature, however. He is perhaps best known as the red-haired kid from the 1970s' series The Partridge Family, who was convicted last year for drug possession and beating up a transvestite prostitute.) 'They wouldn't be screened at prime time,' says Tan, 'but around midnight when people have more time and would be more likely to watch. It's a completely different approach, with customer testimonials. People love them.' Interwood and TV Media's advertisements are currently made in the United States, Canada or Australia and supplied with the product. They are then dubbed into Cantonese with local prices. Although the ads seem to be on continuously, TV Media and Interwood both claim to run roughly 10 a day, split between all four terrestrial channels. TV Media buys its air-time but Interwood has struck a special deal with ATV through which it is charged a per inquiry (PI) rate. In exchange, Lee gives the TV station access to his database which reveals audience response, spending habits and demographics, information which helps ATV to assess what its air-time is worth.
