Limited Global Visibility for ASOS Plc
ASOS Plc operates ASOS.com, an online-only business based in the UK, targeting fashion-forward “20-something” consumers through its women’s and men’s clothing, footwear, accessories, beauty and grooming product ranges. ASOS ships to over 200 countries and stocks 800 third-party brands, as well as its own private label offerings.
ASOS has benefitted from staggering growth in internet retailing, in addition to the increasing popularity of fast fashion. However, competition in ecommerce is intensifying as behemoth apparel brands invest heavily in their online platforms, and pure-play goliaths such as Amazon prioritise fashion. Furthermore, despite the company’s vast geographic reach and robust online positioning, it has yet to gain visible share in the overall apparel market.
On the global scale
Although ASOS ships to over 230 countries, the company has yet to gain any visible market share outside Western Europe and Australasia – predominantly held in the UK and Australia. ASOS has been able to gain considerably more traction in Australasia, as the company entered the market at a time when it was relatively untapped by leading players such as H&M and Zara, and online competition was largely represented by eBay and Amazon. Although establishing a presence in both these regions is strategically sound given consumers’ high disposable incomes and global influence on fashion trends, forecast growth, albeit positive, pales in comparison to emerging regions such as Asia-Pacific, which is set to register a CAGR of 3% in apparel and footwear over the period to 2021, as its market size climbs by USD76 billion.
ASOS Global Presence and Growth Prospects
Source: Euromonitor International
Additionally, as consumers across both developed and emerging markets increasingly favour internet retailing as a means of purchasing fashion, ASOS is well positioned to reap the benefits. Gaining a stronger hold in the global apparel and footwear market will require ASOS to invest heavily in its private label range, and continue to stay ahead of the curve in terms of technological and retailing innovations.
Asia-Pacific: A myriad of dynamic e-commerce growth
Although China represents a challenge in the region, there remains plenty of untapped potential throughout Asia-Pacific. Japan, South Korea and India continue to fuel growth in internet retailing. Consumers in the region tend to be more advanced in their online consumption habits than other countries. For example, India has a larger online market than developed markets Italy, Australia and Spain, and is set to see a CAGR of 9% to 2021, producing absolute value growth of USD5 billion. Furthermore, dynamic markets such as Vietnam, the Philippines and Thailand, albeit growing from lower bases, are set to see CAGRs of 18%, 16% and 13% to 2021, respectively. Replicating its first-mover advantages in Australia in smaller markets across Asia-Pacific will position ASOS well for long-term growth.
Prioritising the US
The US e-commerce market in apparel and footwear remains relatively consolidated in comparison with the global landscape. While brands such as Nike and Old Navy lead the overall apparel industry, the online market is predominantly accounted for by e-tailers and department stores. The leading five companies in internet retailing also produced the most dynamic growth over 2011-2016, illustrating consumers’ strong preference for companies that boast a wide selection of products from a variety of brands, and efficient logistical operations that provide convenience. This bodes well for ASOS given the retailer’s extensive and expanding offering.
Top Absolute Growth for Apparel and Footwear Companies in North America
Source: Euromonitor International
However, as competition heats up, ASOS will need to ensure it differentiates itself effectively from other players, utilising its leadership in digital innovation and carving out its positioning among the younger audience. Notably, the leading growth companies in the overall apparel industry are those that operate in sportswear or fast fashion – two areas in which ASOS can leverage its position to cater to current consumer trends, and capture the attention of its millennial target segment.