International Customers Account For 65 Percent Of Group Sales
ASOS will have to duke it out with dozens of local and international competitors in China
The battle for China’s burgeoning e-commerce devotee is set to get even more intense, as fast-growing British online fashion retailer ASOS plans to launch a Chinese-language site within the next 12 months. Though the company already ships to China and has previously announced eventual aspirations of going local as part of its global expansion effort (chief executive Nick Robertson said back in June 2011, “It is not a question of if but when”), this is the first time the company has laid out specifics, which also include a foray into Russia. While firmly situated in the fast-fashion segment, rather than the luxury niche currently being explored in China by Neiman Marcus, Macy’s and many others, the move indicates that ASOS is confident in placing a bet on the young twenty-something Chinese consumer.
Apparently ASOS has money burning a hole in its pocket, with the company announcing a 42 percent surge in profit in the five months leading up to August 31, to £13.2 million (US$21.3 million). According to a company statement, a “key driver” in its success during this period was a 46 percent increase in international sales, though ASOS also recorded 13 percent rise in sales and gross profits in its native UK. Currently, the international arm accounts for 65 percent of ASOS group sales, with the US being its fastest-growing market and China and Russia sales showing strong growth as well, despite the lack of local language sites.
In launching these Chinese- and Russian-language versions in the coming years, however, ASOS is on target to have five major international markets by 2015, at which point the company hopes to hit total sales of £1 billion (US$1.6 billion). At the moment, ASOS has country-specific sites for the UK, US, France, Germany, Spain, Italy and Australia.
Uniqlo operates an online store on China's Tmall
Despite all the optimism, ASOS will likely find itself in a saturated and cut-throat market upon the launch of its China-specific site next year. In addition to a multitude of domestic e-tailers and online juggernauts like Taobao, all of which are deeply embedded in the discounted fast-fashion market, ASOS will have to contend with the ever-increasing number of international brands and retailers entering the country or adding Chinese-language support. Recently, established players like Zara and Yoox have followed brands like Uniqlo and Levi’s in jumping on the bandwagon, and by year’s end Coach will have launched its own local Chinese e-commerce site as well.
As a less well-known name, particularly in smaller cities, ASOS will have plenty of brand-building to do, and even in major cities like Shanghai and Beijing the company will face popular brick-and-mortar fast-fashion retailers like Forever 21 and H&M. (Not to mention fellow Brit export Topshop.)