ASOS Company Stops Business In China

Britain's largest

ASOS announced its stop operation in China in early April, and its Chinese version website will also be closed this month.

From a high-profile announcement to China to go out of nowhere.

The company's survival time in China is only two and a half years.

It seems that another international electricity supplier in China is facing an acclimatization, which is the essence of ASOS's strategic failure.

After entering China, the quality of ASOS products is out of date.

A single and high price leads to its inability to be localized.

After a long time of loss, ASOS seems to be the right choice to stop business in China.

Gloomy departure from China

ASOS was founded in 2000. Its products are mainly fashion and accessories, and then gradually developed into the largest fashion e-commerce website in the UK.

In 2004, after creating its own men's wear and women's wear brand, the product was fast and cheap because of its fashion and low price.

At present, the company's official website has about 6000000 active users, who provide more than 80 thousand products in the official website, sell more than 800 designer brands, and business has covered the whole world, including Russia, the United States, Germany and France.

ASOS has entered the Chinese market in November 2013, and has invested about 100 million yuan to choose the company's own brand goods for sale in the Chinese market, open RMB settlement and Alipay payment business, and build a customer service, distribution and payment fully localized operation team.

In terms of channel, the company did not copy the platform mode of the UK and other countries. In 2014, it entered Tmall, launched the exclusive "dual channel" official website and Tmall flagship store in the world, trying to attract more attention, and turn many consumers on Tmall into their own users.

But after two and a half years of trial, ASOS China lost a total of 8 million 600 thousand euros.

Its business in the US and Europe has been surging forward.

According to the financial report, as of the end of November 2015, the first quarter of fiscal year 2016, ASOS international sales recorded an increase of 20%, and the growth rate in the US and Europe rose to 42% and 29% respectively.

ASOS chief executive Nick Beighton acknowledged that the Chinese market, as the fifth largest market of the company, is very different from any other market, and its products have not been recognized by Chinese consumers.

At the beginning of April, ASOS announced that it would terminate the operation of China's mainland. China's official website will be closed. The Chinese distribution center and offices in Shanghai will also cease operation. The decision will allow the company to pay a closing cost of 10 million and a 4 million operating loss.

Mode blocked

ASOS's gloomy exit is in sharp contrast to the high-profile entry into China three years ago.

A former ASOS China executive said overseas students and fashionable young consumers are the main customers of ASOS services. They are more sensitive to price changes and can also use the company's website to purchase goods more conveniently.

ASOS UK website launched the "global mail" as early as 2010. After the platform purchased goods, postage packages sent by Royal Mail were free of postage.

Although postal delivery is slow, mail packages will be sent through China Post after entering China, but the "global mail" measures effectively attract a large number of overseas consumers to shop through their official website.

However, after ASOS entered the Chinese market, the advantage of freight pportation disappeared.

In ASOS, China's official website and Tmall flagship store are 249 yuan, which is much higher than other international fast fashion brands.

Beijing Business Daily reporter survey found that in Tmall flagship store, UNIQLO, C&A, Forever21 and other fast fashion brands full of 200 yuan postage, ZARA is free of charge, compared with these brands, ASOS freight advantage decreases.

The price is high, the product is lagging behind, and the location is out of order, which is a bruising effect of ASOS.

The location of the company in the mainland and overseas is fashionable, low price and fast update, but the richness of its products and the trend following design have not been well displayed in the Chinese market.

Consumers soon found that the prices of products purchased on the official website of China seemed to be higher than those purchased on the official website of the United Kingdom.

At the same time, with fewer options and lagging products, the positioning of China's ASOS website is not in line with its fashion and update speed.

For consumers, the most important thing is that the products of ASOS can not be localized, or that the British brand has failed to get the taste of Chinese consumers, leading to the fact that the Chinese consumers are not buying the products that are imported from Europe and America.

After visiting the Beijing Commercial Daily, a reporter found that in his official micro-blog's commentary area, Chinese consumers could often see the suggestion of "reducing the design of the" V "clothing.

Cheng Weixiong, general manager of clothing expert and Shanghai Liang Qi Brand Management Co., Ltd., said that after ASOS entered China, the Chinese market could not be thoroughly understood. The company was mainly in China parity products, and faced with competition from the fast fashion giants such as ZARA and UNIQLO, such as the fast fashion giants and Taobao, and so on.

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Strategic mistakes

When ASOS entered China, he was optimistic that cheap and fashionable products had attracted many Chinese people to buy the company's official website, so ASOS could gain success by using this advantage to enter the Chinese market.

Overseas, ASOS cooperates with fashion trend brand, designer brand and even light luxury brand to build up purchase platform, and sell its own brand as a supplement.

In China, ASOS mainly promotes its own brand of men's wear and women's wear products, while other brands have less clothing.

In the British official website of the brand, the Beijing Commercial Daily reporter found that only 400 brands of women's clothing were sold, most of which were the third party brands.

In the United States, this figure has reached 348.

In China, there are only 42 women's clothing brands sold on the ASOS official website.

In Tmall flagship store, the products sold mainly rely on ASOS own brand.

A former company executive said that after ASOS entered China, because of the limited cognition of Chinese consumers to ASOS and the small number of designer brands, a win-win strategy with other brands could not be promoted in China for the time being.

China's regional brands are also less related to ASOS's continuous price cutting.

A year after entering China, the company has said that the price cuts continued, causing some brands dissatisfied, and said it would not cut into overseas markets.

ASOS had hoped to devote much of his energy to the first-line market after entering China, and then gradually extended its platform mode after the expansion of brand influence.

But it doesn't seem so easy.

In China, there are a few websites similar to ASOS platform, many of which have taken a firm foothold in the market.

As the largest online sales platform of China's popular brands, YOHO! Since its launch in 2008, it has attracted nearly 500 brands, including international and domestic popular brands, top street brands in Japan and Korea and China, Hong Kong and Taiwan, and mainland original brands.

Compared with ASOS, YOHO! The location of the "tidal platform" is clearer and the product is more.

Before the exit, ASOS introduced China's international brand and its YOHO brand. The overlapping rate of the existing brands is nearly 70%. Under the condition that the positioning is not clear and the unit price is basically the same, the platform mode of ASOS is difficult to establish in China.

A senior fashion industry practitioner told reporters that the biggest problem with ASOS was "unsuccessful mode".

At the same time, he said, the positioning of ASOS fashion business is also very awkward. After all, in the fiercely competitive China of e-commerce platform, it is difficult to break through the eyeing competitors from the vague concept of "fashion business platform". In 2016, China's business slowdown seemed to be the right choice.