Why Primark couldn't say 'no' to ASOS

With a one billion pound sales ambition in sight, the UK online-only retailer Asos achieved notable results by aiming for aggressive momentum.  Founder and CEO Nick Robertson has had a very positive outlook for the company's global expansion, narrowing its target audience to a niche market of trend-forward twenty-somethings.  

 

Associated British Foods' budget retailer Primark has unexpectedly announced a trial partnership with Asos just two month after deciding not to go forward with their own online channel.   

 

Primark is steadfast in its opposition to an online operation, preferring to open new and bigger stores at a time when high street rivals are focusing on multichannel sales, smartphone apps and click-and-collect services
— The Guardian

Although Primark has reported exceptionally strong sales figures this year, with a 24 percent increase to £2 billion for the first half of its financial year, the opportunity to partner with Asos was perhaps to good to say 'no' to.  As done in their Boutique section, Asos will run trials consisting of a small product selection, which will allow Primark to continue to focus on its brick-and-mortar expansion.  The deal allows Primark  to test how an online channel will speak to its international customer without a heavy up-front investment.  

 

Asos has proven global success with a 37 percent increase in quarterly sales, drawing from British high street fashion and maintaining a keen eye for trend.  Primark's rival high street brand New Look joined Asos last year on the site and has become one of the site's top selling brands. 

 

Source: AB Foods 2012 Annual Report 

 
 

Asos' Advance in Asia

Written by Wendi Chang
Image from asos.com

Image from asos.com

Asos' stock continues to rise as they move forward in their journey to be "the number one online fashion destination for twenty-somethings, globally", says founder and CEO Nick Robertson.  The group's revenues jumped 33 percent to 359.7m pounds for the six months to February 28.  At the same time, they provided additional details on their expansion to Asia.  

Forty percent of Asos' sales are generated in the UK, and their international businesses in US, Australia, France and Germany are growing steadily.  "Our next focus is on 'tactical' countries", said Robertson.  The Russian site will launch this month, and the People's Republic of China will soon follow.  Although not expected to generate a profit for two years, the investment in China is a key part of the company's global quest - and the company is taking the time to do it correctly.  Separate technology, stock and a distribution hub are all part of the approximate 5m pound a year setup cost.  

In the meantime, the UKs largest online-only fashion retailer is aggressively expanding their unique online trading platform, BOUTIQUE.  Independent label and vintage specialists from around the world, including Asia are featured.  Fabitoria, a Taiwanese brand, was recently approached by asos.com to be part of the marketplace, which they joined this month.  The global exposure for local brands will be significant, and it allows Asos to test product in each market before entering in a larger way - a win-win situation with better visibility for both asos and the marketplace brands.