Asos reveals its plans to enter Chinese ecommerce market

Asos has made known its intentions of entering the Chinese ecommerce sector, with initial plans calling for investment of upto £12m to £18m over the next three years. It aims to reach £1 billion sales figure within that period. The plans call for investing £4 to £6 million every year with a dedicated distribution hub set up in the region. The company also plans to launch their Russian web site in the coming month.

Comparing the market of Russia and China, CEO Nick Robertson mentioned China is different where technology and stock has its own separate distinctive traits. He acknowledged it would be tricky logistics involved in moving the company’s stock from Barnsley to Beijing. He believes the venture would be a loss making one for the first two years, more so since China has never been known for generating instant profit for any one. In comparison, Robertson estimates things to be simpler in Russia.

Asos has its main roots in UK which makes for 40 percent of their sales. The company’s sales touched £137.6 million which marked a 26 percent rise in the 6 months preceding February. The plans for an international foray stems from the rise in its overseas revenue the company has experienced, which amounts to a rise of 33 percent totaling £359.7 million during the period. Hence the aim of touching a sales figure of £1 bn.

Fashion wear being their forte, the company has been able to make most of its revenue return from products of their own label. The group returned figures of £60.30 in the stock market which was an up by 6 percent.

Apart from a renewed marketing effort which shows more reliance on digital marketing, the company has also introduced new procedures to win consumer confidence. These includes faster deliveries while also allowing customers to track their orders. This resulted in a 45 percent rise in expenses for the company, which is expected go further northwards as they aim to go for free delivery and returns in all of their markets.