(1) Introduction
This report investigates and evaluates the reasons for ASOS failed in China market. ASOS, standing for “as seen on screen”, is a British online fashion and beauty retailer firstly operating in 2000 in UK. To become the top 1 fashion brand, one of the ASOS’s strategies is to be truly global. With the confidence of being successful in China market, ASOS entered China market in 2013. Two years later, having suffered a loss of profit, ASOS discontinued to operate in China and prepared to exit China market. A general background of general ASOS and ASOS China is given and the main reasons for ASOS to enter China market are justified. Next is the comparison of operation performance between ASOS UK and ASOS China will be demonstrated.
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ASOS sells over 80,000 branded and its own-brand products mainly specializing in cutting-edge clothes and accessories through localised mobile applications and online-shops.
Being truly global is one of ASOS marketing strategies with the mission to become number 1 fashion brand for young people. The global market is divided into three levels by ASOS. The first level is called “strategic” country including UK, Australia, USA, Germany and France. The second level is “tactical” country containing China, Russia, India and so on. The last level is the rest of the countries in the world.
(1.2) About ASOS China
On November in 2013, with great confidence, the official announcement of opening China market was released. Meanwhile, the company’s Chinese website called “asos.cn” was launched and the international office was opened in Shanghai, China. After opening China market, on April in 2014, ASOS launched its online-shop on “Tmall.com”, China 's leading online shopping platform within Alibaba
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Nevertheless, due to the challenge of operating in China and the loss of profit in China market, on April in 2016, ASOS decided to discontinue its China in-country operation, which meant that ASOS could not survive in China market and failed.
(2) Reasons for ASOS enter China
The research identifies three main reasons that ASOS entered China market.
The first reason is the strong buying power of Chinese people.
(2.1) Disposable Income Table 1 Source: National Bureau of Statistics of China, 2014
The “table 1” show that the Chinese people’s disposable income keeps on increasing stably from ¥10493m in 2005 to ¥24564.7m in 2012. “Table 2” indicates that the total retail sales of consumer goods of China also grow steadily in recent year.
(2.2) Retail Sales of Consumer Goods Table 2 Source: National Bureau of Statistics of China, 2016
Based on the “table 1” and “table 2”, Chinese people both have an increasing disposable income and are very willing to go shopping. Therefore, China market tends to be very profitable for ASOS.
To gain a big market share is the second reason for ASOS to enter China market.
(2.3) Chinese Population Table 3 Source: National Bureau of Statistics of China,
ASOS is a global online fashion and beauty retailer selling more than 50,000 branded and own-label products in menswear, footwear, jewellery, accessories, and beauty
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