Retailers shift their ad spending from TV, radio and print ads to digital ads.
Asos sold over $10 million from its Chinese e-commerce site in its first five months, and has learned a lot about how Chinese consumers differ from Europeans.
SHANGHAI—While several Western retailers have launched e-commerce sites in China to complement their physical stores in that country, Asos Plc became one of the few foreign web-only retailers selling in China when it launched Asos.cn last November.
In its first five months, the Chinese site generated 66 million yuan ($10.6 million) in sales, Wang Yiqun, Asos China’s general manager, said last week in a presentation to the 2014 World Retail Congress China conference in Shanghai.
“Our business is doing well, but we could have done better. “ Wang said. She said the e-retailer expected strong demand because Chinese consumers already were buying a lot from its English-language U.K. site. “Even before we entered China, Chinese consumers were purchasing 300 million yuan ($48 million) worth of products annually via our main site in the U.K. “
With Asos.cn, Asos now has localized sites in nine countries: the United Kingdom, United States, China, Australia, France, Germany, Italy, Spain and Russia.
Through its warehouse in Shanghai, where Asos China has its headquarters, the e-retailer delivers within two days to most Chinese cities, Wang said. Asos also offers free return within 14 days and free shipping for orders above 249 yuan ($40.14).
Asos stands out as a foreign retailer selling exclusively online; such retailers as U.S.-based Gap Inc. and Tesco Stores of the U.K. sell both through bricks-and-mortar and online stores in China. Like Asos sites in other countries, Asos.cn not only sells Asos-branded products, but also such other brands as European labels Karen Millen and Mango.
Besides selling on its official Chinese site, Asos also sells on other Chinese e-retail platform such as Tmall.com, a marketplace site operates by Alibaba Group Holding Ltd., the dominant Chinese e-commerce company that is planning to sell stock on a U.S. exchange this year.
To promote its brand, Asos has sought to immerse itself in the daily activities of its target demographic, young Chinese consumers. The company made an alliance with the Midi music festival, which took place in Shanghai in April, and provided tips on what to wearing at the festival through Chinese social networks Weibo and Wechat. Fans who participated in the social media campaign were entered into a lottery for prizes. As a result of this campaign, Asos China increased by 120% its followers on Chinese social media, and the resulting sales exceeded marketing spend 300:1, Wang said.
In its first months of selling online in China, Asos has learned about the differences between Chinese and European consumers, Wang tells Internet Retailer. For example, she says, “The European consumer could wear a top for all seasons, but the Chinese consumer wants to purchase clothes specifically for winter,” she says.
Sizes are different, as well, with the most common size in Europe being 12 and in China 10, she says. Asos China has designed a line of petite clothing especially for China. In addition, Wang says, evening dress sales have been slow because many Chinese consumers consider the Asos designs too “scanty.”
In general, she says, Chinese consumers need to be educated in Western ways of thinking about fashion. “In a survey, we asked Chinese consumers to choose their favorite apparel for different situations, such as working, home and leisure, from 20 clothing styles,” Wang says. “Surprisingly, most Chinese consumers only choose one style for all the occasions.”