Asos must not forget home as it grows overseas

Asos is to introduce a number of small marketing teams around the world to create more localised marketing in the next phase of its global expansion. It must, however, be careful not to forget about marketing in the UK in its rush to expand overseas.

Rosie

It has reported a doubling of its annual profits and a 49% increase in group sales driven by a 103% increase in international sales in the last year. UK sales, however, were relatively sluggish with a 7% increase.

The businesses financial performance signals that it is still hitting the right note with customers, and shareholders alike, but Asos should not be complacent.

Until recently, all of Asos’s marketing was lead out of its UK headquarters. It set up its first overseas marketing office in Australia in recent months and now plans to do the same in countries where it has launched websites, such as Germany, France and Italy.

In its end of year trading update this morning, CEO Nick Robertson said that it hopes to use these in-country teams to “amplify” marketing efforts internationally.

Now that the brand is more established overseas, it is sensible to have teams in place in each market to drive effective local marketing, within the global framework, but it should be wary about taking its eye of the more mature home market.

Robertson said this morning that because of the competitive nature of the business it is in, particularly womenswear, it must be “at the top of its game from a fashion, buying and merchandising and marketing perspective.”

The strength and vigour of Asos’s marketing was celebrated earlier this week at the Marketing Week Engage Awards 2012 where Fiona Marshall, senior global brand manager, was named as this year’s one to watch winning the Rising Star award.

The fashion retailer also won the industry gong in the digital category for its campaign for its Summer Sale.

Earlier this year, however, analysts warned that Asos must up its marketing game to keep its strong position in the UK, where its growth is slowing, when compared to its fast expanding overseas businesses.

Online is becoming more fraught with competition in the UK as high street retailers improve their e- and m-commerce capabilities and as younger e-commerce businesses such as Missguided become more established, which means that the market is no longer the same one-horse game it was when Asos started out.

The business increased its marketing spend by 38% this year, to £19m which while it includes a reclassification of delivery costs as a marketing expenditure, demonstrates the importance Asos places on the discipline to grow its business overseas. But, it must be sure that this investment also goes to stimulate growth in the UK, and not just to support new international markets.

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