Placeholder Image

Subtitles section Play video

  • If you had invested £1,000 in ASOS in 2001, it would have been worth 
more than £235,000 or $301,000 by the end of 2020.

  • Today, ASOS is one of the largest online-only fashion marketplaces in the world

  • boasting 850 brands including Dr. Martens, Abercrombie and Fitch,  and Calvin Klein. 

  • Founded in the year 2000, shortly  
after the dotcom bubble burst,

  • the platform was worth $8.6 billion atits peaksurpassing 
 retail stalwart Marks and Spencer in market capitalization

  • Today, ASOS is available in 10   
languages across 200 markets.

  • At the end of 2020, ASOS boasted  24.5 million active customers,

  • of which 7.6 million were located in the United Kingdom

  • Like many fashion start-ups, the company was 
unprofitable  for years, had its fair share of misfortunes,

  • while a series of miscalculations saw  
the company exit China in 2016. 

So, how did this fast-fashion start-up 
  transform into a dominant player in the industry

  • ASOS had its beginnings asTV product placement company

  • founded by Nick Robertsonthe great-grandson of wealthy retailer Austin Reed, in June 2000, under the name 'As Seen on Screen.'

  • The company later evolved its fashion business to an online fashion marketplace,

  • selling designer outfit seen on celebrities at affordable prices.

  • After a $4.2 million investment from his older brother and friends,

  • the company debuted on the junior market of the London Stock Exchange in October 2001

  • at £0.20 per share and raised  slightly over $4 million.

  • Then, the e-commerce industry was struggling, and ASOS was unable to establish 

  • a clear brand identity to break the dominance of traditional fashion retailers.

  • For example, it was selling bags close to $600 to its market of twenty-somethings, making it unaffordable for many.   

  • At the same time, the company was investing heavily in technology, logistics and increasing its product range.

  • It wouldn't be until 2004 that ASOS would post  its first profit, a little over $200,000.

  • But this success appeared short-lived.

  • A year later, three massive explosions at an oil depot  near its warehouse in the U.K. damaged $9.4 million worth of stock,

  • just before the Christmas holidays, and along with it, ASOS's festive earnings.

  • The company was forced to cancel new orders, issue refunds and suspend trading of its stock.  

  • But 2007 marked a turning point, not just for ASOS, but for the e-commerce industry as a whole.

  • Broadband was increasingly becoming accessible to households,

  • Apple just launched the first iPhone, while Facebook was trying to displace MySpace and Friendster as the dominant social media platform.

  • Investors began to pay attention to online-only businesses, and ASOS was no exception.   

  • Between 2007 and 2011, the company's share price shot up from $2.36 to $38.50.

  • ASOS's popularity skyrocketed, as celebrities sported its outfits, increasing its visibility.

  • In 2014, China dominated the e-commerce space with $458 billion in sales, surpassing

  • the United States to become the world's largest e-commerce market.

  • As ASOS expanded at breakneck speed at home and abroad,  China was a priority market.

  • But the country's e-commerce regulations were complex,

  • and ASOS struggled to compete with the local juggernauts such as Alibaba and

  • After splashing $13.5 million to launch its local service in 2013,  the company withdrew from China less than 3 years after it launched.

  • Back home, the competition was heating up in its backyard too

  • Traditional retailers like Zara, under parent company Inditex, were expanding their online presence,

  • while new competitors like Boohoo were  undercutting ASOS with cheaper wares.

  • In 2014, $633 million was wiped off its value, following a stark profit warning from the company

  • Its exit from China in 2016 turned out to be a blessing in disguise.

  • Free to focus on other markets, it began to separate itself from the pack,

  • by adopting inclusive and sustainable strategies that appealed to fashion-conscious twenty-somethings.

  • Besides highlighting models of varying ethnicities, and sizes, ASOS also launched a 'fashion with integrity'

  • program in 2010 to ensure ethical and sustainable business standards.

  • In 2015, the company was ahead of its peers when it published its stance against modern slavery in supply chains

  • Two years later, the fashion retailer published  a list of all its factories to improve the transparency

  • of its supply chains, while its unannounced audits  of factories continued apaceeven during the pandemic.

  • And the company's aggressive strategy to appeal to its target audience and outshine its competitors didn't end there

  • To fend off rivals such as Boohoo and Zalando, ASOS used social media influencers to advertise

  • its clothing to younger consumers and collaborated with celebrities including

  • Little Mix's Leigh-Anne Pinnock and basketball player Ovie Soko

  • Finally, in a bid to remain competitive, the company, provided a seamless,

  • end-to-end process that enabled consumers to track every step of the delivery

  • On the back of its strong  financial performance in 2017, 

  • the company's share price  hit a record high of $94. 

  • In the fast-fashion world, speed matters.

  • Fashion retailers were  churning out new designs from 

  • the drawing board to the sales  floor in as little as one week.  

  • The pandemic accelerated the shift to e-commerce, meaning only the fastest firms would survive.

  • With most people staying indoors  and holiday plans canceled

  • fashion retailers were  facing an existential crisis.

  • Many analysts questioned  whether ASOS could be as nimble 

  • as its rivals because of the sheer  number of brands under its belt.

  • Zara, for example, kept  production local and close to its 

  • headquarters in Spain and was used  to churning out new designs quickly

  • ASOS was hit severely in  the first quarter of 2020, 

  • with group sales plunging as much  as 25% towards the end of March.

  • But it recovered quickly, producing more luxurious loungewear products to cater to customers' needs,

  • many of whom were now working from home as the demand shock moderated.

  • By the end of June, howeverits sales jumped by 10% and it posted over $1 billion in revenues.

  • For many brick-and-mortar businesses, the story was much different.  

  • In 2020,  Inditex, the biggest fashion group in the world, announced plans to 

  • close between 1,000 and 1,200 stores, or 16% of its outlets worldwide.

  • The same year, L Brands, the  parent company of Victoria Secret

  • closed 265 stores, the H&M group shut 170,   107 while Hong Kong-listed Esprit shuttered 

  • all of its 56 stores in  Asia outside mainland China.

  • Moreover, the retail empire Arcadia, which owned brands like Topshop, Topman,

  • Miss Selfridge and HIIT, collapsed at the end of  November 2020.

  • In February 2021, ASOS acquired Arcadia's  prized brands, leaving the physical stores out of the deal

  • This highlights ASOS's focus on diversifying its brands

  • and the industry's shift away from in-store shopping.

  • While 2020 was a successful year for ASOS, its fortunes could change in the blink of an eye if it isn't fast and agile enough.

  • To remain competitive, it must be reactive to customers' changing tastes,

  • fix its scaling issues abroad, and continue to expand its offering

  • Thank you so much for watching our video. What do you guys think of Asos?

  • Comment below, and as usual don't forget to subscribe!

If you had invested £1,000 in ASOS in 2001, it would have been worth 
more than £235,000 or $301,000 by the end of 2020.

Subtitles and vocabulary

Click the word to look it up Click the word to find further inforamtion about it