For a while it seemed as if ASOS, the UK-based online boutique beloved of tastemakers like Cara Delevingne, was on the top of the heap.
It’s been one of the most popular shopping online destinations in Australia.
But now ASOS has revealed that it’s going to cut its prices to Australian customers and guarantee free shipping, in an attempt to offset a massive fall in profits.
So what’s gone wrong?
For one, ASOS is always at a bit of a disadvantage: it’s not based on the ground. So overnight shipping is impossible, unlike local brands.
For another, the Australian dollar has resurged, meaning that the online retailer’s profits have sunk in our sector. All in all, it’s great news for Aussie retailers, with Dotti and Bardot, who specialise in the same sort of cheap fast fashion, riding the high. Dotti’s online sales actually increased 61% in the last year.
But this chaos might mean ASOS has to take drastic steps to recover. ASOS were already having a bad year, with the earlier destruction of 20% of all the clothing at one of their UK warehouses in a suspicious fire. It all seems like a boring accounting problem, but it actually has big implications for how – and where – we shop.
Australia is one of the new hits on the map for big international retailers. H&M, Zara, Gap and other chains are storming in, keen to take advantage of our fashion-conscious population and our good economy. And it looks like it’s a good thing that they’ve put their stores on our shores: if ASOS is feeling pressured, it’s not good news for other big chains who are trying to crack the Australian market with online sales alone.
After all, why would we buy something that takes five days to ship when we can get a local equivalent at the shops?
So what’s next? One, ASOS will be doing some scrambling to get us to buy – so look out for bargains, great shipping deals, and special arrangements for Aussie customers. But you should also expect more energy by local brands as they step up to compete with the big overseas labels.
With ASOS’s annual sales in Australia hovering at $200 million, though, don’t count them out just yet.
It’s an exciting time to be an Australian shopper – even if it’s not a good time to work at ASOS.
Image: ASOS.
