ASOS is failing to go global

News that ASOS is going through yet another of its perennial troughs reveals the weaknesses that will lead to a fall in profits of up to £70 million next year compared to this year. The company is quite reasonably blaming freight and duties costs, inflation, the cost of coping with supply chain disruptions and having to invest more in customer experience.

To be fair, other pureplay clothing retailers have suffered in the same way, and it is reasonable to expect many of these pressures to be short term. However, what the fall in profits does not reveal is the extent to which the company continues to fall behind on selling across borders. While it was buoyed for some years by domestic demand, it must now look for opportunities elsewhere.

Success in other countries currently seems like a stretch given that ASOS is still only delivering modest growth in the EU and the US, and the Arcadia brands it bought simply may not travel.

Glocal knowledge needed

Brand visibility aside, ASOS lacks the local knowledge and technical infrastructure to do global properly. But it could so easily fix this. The growth opportunities are there and there are companies that know these markets and have the supply chain skills. The problem in this case is that ASOS has tried to do too much in house in the mistaken belief that it needs to protect its IP. But it can keep its data secure while working with partners that already have form in growth economies such as Thailand, Vietnam, Malaysia, Singapore, Indonesia and the Philippines. And not forgetting Morocco, Chile, Puerto Rico and Egypt, which all had 200% growth in cross-border commerce in 2020.

In terms of tech spend, this is where the money should go. The company has said that it will invest in AI and customer data, but it was supposed to lead in these areas years ago, to the extent of having one of the largest data science teams of any pureplay. What happened to those investments and how did they pay off?

Global growth is not the be all and end all for ASOS which still enjoys strong demand at home, but competitors that recognise no country barriers are creeping up, and the company could fill the current hole pretty quickly in all the above territories that love a British brand.

Join Retail Connections

Register here

Related insights

Fem-tech brand, Elvie, builds DTC performance, optimising and growing its owned channels with Wunderkind


Selling technology to retailers – marketing in 2024

ESW Named As Shopware Gold Technology Partner

Brand-owned post-purchase delivery updates key for trust and conversions, data from Scurri and IMRG reveals

Pricer appoints former Clear Channel exec as Chief Product Officer

Retail Technology Show 2024 opens for registration

Join Retail Connections

Get the latest industry views and exclusive member offers sent direct to your mailbox.