Asos is on the brink of breaking into China’s booming e-commerce market, further broadening the online fashion retailer’s global reach.
Asos, which on Wednesday reported a near-40 per cent year-on-year jump in its annual revenues to £769.4m in the 12 months to August 31, said that its Chinese operations were “now in [their] final testing phase and will be launched imminently”.
“We have a dedicated Chinese-language site initially offering about 2,000 locally relevant own-brand styles, an in-country multidisciplinary team, dedicated delivery solutions and payment methods, local language customer care and a domestic distribution partner,” the group said.
“Initial testing shows that these elements are all functioning effectively,” the company added.
Asos first flagged its attempt to break into China’s e-commerce sector, earmarking between £12m and £18m to be spent on the venture over the next three years, using the cash to set up a dedicated distribution hub in the country.
“Our international focus during the next six months will be in further establishing and growing our Chinese operation and continuing to grow our proposition and market share in our strategic country targets of the UK, US, France, Germany, Australia and Russia,” Asos said.
Earlier this year, Nick Robinson, Asos chief executive, said the group’s Chinese foray would “be lossmaking for the first two years”.
The growing popularity of buying clothes online has helped Asos more than double its share price over the past year, and risen fourfold since late 2011, boosting its market capitalisation to £4.5bn.
Its appeal with investors can be partly attributed to the company’s rapid foreign expansion – a move undertaken by Asos in order to cut its reliance on the UK market, which accounts for about 40 per cent of sales. Its bottom line is similarly compelling: it reported a 37 per cent year-on-year increase in pre-tax profit to £54.7m.