Globalization

As a solely online entity, ASOS reaches a global audience through its e-commerce site.  Currently, the site ships to over 160 countries. 

Opportunities: 

A larger target market creates extreme opportunities for growth and expansion.  Currently, international sales account for a large percentage of ASOS’ total sales, representing an even larger portion of the company’s recent growth. Sales outside the UK increased to £332.6m last year, including a 91% increase in the US. According to the company’s CEO in an article posted on WWD “Our international business grew by 45 percent and now accounts for 59 percent of our total retail sales…Robertson added that the French and German businesses were also “on fire,” and that stand-alone Web site launches were planned for China and Russia in October.”

Challenges: 

ASOS provides free shipping as well as free returns to consumers across the globe.  This creates a logistical challenge for the retailer, as it is faced with the challenge of shipping goods in a timely manner to locations throughout the world from its distribution center located in London.  Additionally, returns, which occur in 30% of placed orders, represent an additional logistical challenge as well as an immense cost implication to the retailer.  As reported by the Telegraph, free shipping on a global level costs the company around 100 million pounds on an annual basis. 

Barriers to Globalization:

In order to provide customers with excellent and individualized customer service, location based sites must be available using language, sizing, and currency that the user is comfortable with.  This requires retailers to create a site that is tailored to their customers based on their geographic location. Currently, ASOS has the following international sites: UK, USA, France, Germany, Italy, Spain, and Australia, with future plans for expansion.

 As almost all retailers sell their merchandise through e-commerce channels, there is increased competition in the global community.  However, ASOS is able to combat this competition through its distinct and exclusive brands and products as well as its inimitable, interactive site.