New era in trading

Deal ties U.S. infomercials to China sales

NEW YORK — An agreement between China and the U.S. Electronic Retailing Assn. promises to turn the trickle of U.S. exports to China into a flood of direct sales.

ERA president and CEO Elissa Myers confirmed Tuesday that the agreement, signed late last week, connects her organization’s infomercial-oriented members to a group established by China Central Television to introduce that country’s 2,000 local television stations to direct response television.

In a matter of days, the CCTV-sanctioned China National Television Direct Sales Network has already secured interest from its charter 161 TV stations in more than 100 products already offered for direct sale in the U.S.

As an indication of the potential volume this opportunity represents, Myers reported that a single Chinese TV station is placing an initial order for more than 100,000 units of an infomercial-sold folding bicycle.

ERA China, the trade group’s official unit dedicated to developing China’s direct marketing industry, will essentially serve as a watchdog to assuage concerns of both U.S. exporters and Chinese importers.

Eventually, the group also hopes to help introduce Chinese exporters to the U.S. market.

CCTV, the Chinese government’s centrally controlled TV operator, deemed such a group a necessary part of the infrastructure to support China’s increasingly open-market economy.

Much of that infrastructure is otherwise in place, including government-installed cable in 80% of China’s 900 million households. The country also boasts 320 million TV sets, dispersed among 87.4% of the population.

71.3 mil credit cards

The payment mechanism necessary for a direct sales effort is also surprisingly far along, as 71.3 million credit cards are already in the hands of Chinese consumers.

While that’s less than 10% of China’s total population, it’s interesting to note only 75 million U.S. consumers have credit cards. What’s more, the Chinese government expects to have 200 million cards in circulation by the year 2000.

Yibin Liu, executive director of CCTV’s TV Shopping Co., reported through Myers that the frugality instilled in his countrymen was “creating a problem” for protracted economic expansion.

Thus his conviction, relayed by Myers, that direct-response TV “is an effective tool that will help transform China into a society of consumers, resulting in the expansion of our economy.”

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