ASOS is calling time on its Chinese adventure.

It will still serve Chinese customers through its global website and ship clothes from Europe, but its local warehouse and 60 Shanghai-based staff will go.

Here are five reasons ASOS pulled the plug.

And for more on the rise and fall of ASOS in China, download: The China Digital Report, Q1 2016.

1. The learning curve was too steep

ASOS committed whole-heartedly to the Chinese market in 2013 when it set up its domestic operation, rather than shipping directly from the UK.

The chief exec has been widely quoted in the press, discussing the complex regulations in the clothing trade in China.

This was partly to blame for slow growth in 2014, as labelling and China Post caused some operational headaches.

Though the Chinese postal service has opened up in the past five or six years, becoming less protectionist and delivering a better service, it still caused difficulties.

Prior to launching, Chinese customers had to pay a series of import taxes on clothing.

Once the local warehouse was opened, these disappeared, but trade regulations still demanded a certain standard of labelling (materials, washing instructions etc).

Although labelling was likely easier to manage on ASOS's own brands, it seems to have proved difficult when dealing with hundreds of other brands, too, leading to restitching of labels and costly upheaval.

This learning curve on regulation (amongst other things) was steep enough to mean a loss of £4m in the last financial year.

2. The scale of the country caused unforeseen problems

One seasonal range of clothing was seen as insufficient for a country with many regions and climates.

Summers are dry in some regions and tropical in others. Winters range from freezing (-20°C) to mild (10°C).

With such big competition in China, ASOS needed its range to give it a fighting chance across the entire market.

3. The ecommerce pond is incredibly big, harbours one massive pike

Forbes states that Alibaba commands 80% of the Chinese ecommerce market.

Forrester in early 2015 put the figure at 57% for Tmall (the B2C part of Alibaba, alongside B2B Taobao) and 21% for the fast-growing

However, when it comes to mobile, Forrester gives the figure as a staggering 85% for Alibaba and 7.1% for

Whatever the figures, Alibaba is a behemoth in the Chinese ecommerce market and its domination has made it hard for

Yes, like Marks & Spencer and some other British retailers, ASOS has a presence on Tmall.

Chief Executive Officer Nick Beighton told Bloomberg in a phone interview, “The Chinese market is unlike any other we operate in. Getting eyeballs on our products has proved very difficult.”


4. The Chinese economy stalled

The Chinese economy grew 6.9% in 2015, but is currently seeing the slowest rate of growth for 25 years.

This has had an impact on the spending of the burgeoning middle classes, with ASOS no doubt wary that a recession in the country would have impacted sales.

5. ASOS' brand cachet was not strong enough 

Beyond Alibaba, ASOS was also failing to compete with local brands.

Millward Brown's 2016 Brandz report of top 100 brands according to Chinese consumers is conspicuous for it's total lack of international names.

The total value of these 100 home-grown brands was seen to grow 13% from 2015 to 2016.

Over the past decade, it seems that it's not only foreign products that are associated with luxury and great quality. This effect may have impacted ASOS's attempts to find loyal customers among Chinese millenials.

Ben Davis

Published 12 April, 2016 by Ben Davis @ Econsultancy

Ben Davis is Editor at Econsultancy. He lives in Manchester, England. You can contact him at, follow at @herrhuld or connect via LinkedIn.

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Comments (1)

Arron Zhang

Arron Zhang, Business Consultant at Advangent

For most Chinese consumers, ASOS is a very niche brand so it's hard to find its position. The other thing is, there are quite a few purely online fashion stores on Tmall, they've made their name on Taobao and then Tmall, but ASOS doesn't have that process in place thus difficult to get visibility.

about 2 years ago

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