Executive Summary

Britain-based apparel giant - ASOS is a pioneer in the online retail industry. Their popularity has been ever-growing and even championed through the COVID-19 pandemic. However, the company has been struggling to maintain its current position in the e-commerce apparel industry. A steep decline in market share along with a fall in customer loyalty has resulted in a difficult year for ASOS. By entering the emerging market of South Africa, which has extensive growth potential, not only will ASOS emerge but also dominate the online fashion industry. The report details marketing objectives to achieve that goal and outlines strategies to implement them. The South African market is segmented to identify the appropriate target audience. Customer profiles are designed based on the audience to visualise ASOS’ intended South African customers. With the use of perceptual maps, the current position of Asos is determined with respect to its global competitors. Following the entry of ASOS into a new economy, another perceptual map illustrates its proposed position relative to local competition. Despite ASOS’ global shipping policy, heavy customs duties discourage consumers from online purchases. By launching ASOS in South Africa, this obstacle will be eliminated. It is also a strategically progressive decision as it will attract an entirely new consumer base for ASOS. The launch will be followed by the establishment of a fulfilment and returns centre within South Africa. This is in line with the market penetration strategy followed by ASOS in other markets such as the USA and Australia. ASOS’ robust supply chain combined with timely delivery will account for an exceptional user experience for its new customers. Additionally, the country-of-origin effect will impact the purchase intention of the customer subsequently driving up sales and increasing ASOS’ market share. Furthermore, the large-scale population of South Africa will allow ASOS to construct a new loyal customer base.

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A. Situation Analysis 

ASOS’ website and mobile application are available in 10 languages in over 200 markets. As shown in Figure 1.1, the company’s brand knowledge in the UK is remarkably high. In 2022, 88% of the population has heard of ASOS and 46% like it, also showing a growth in popularity of 8% from 2021 to 2022 (Statista, 2022 a).

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These strategies allowed the brand to decrease the shipping price and mitigate customer service issues such as return concerns, payment methods and delivery options. These strategies allowed the company to show growth in sales, driven by the performance in the countries mentioned (ASOS, 2014). This outcome was first shown when ASOS launched in the US (Marketing Week, 2010), resolving the barrier of customs and heavy-duty fees.  

Moreover, the 2020 pandemic marked a shift in the company’s recent performance. A decline in capitalisation was shown until the COVID crisis hit, which led to an increase from 3.87 billion USD in 2019 to 6.5 billion USD (Statista, 2022 b). As for current issues, ASOS is facing a dramatic drop in revenue impacting its growth for the year. This is particularly related to the inflationary pressures on customers. These pressures translated themself into the customers’ behaviour. ASOS also observed an “increase in return rates through the year, rising above pre-pandemic levels” which led to an increase in inventory in their fulfilment centres (ASOS Plc, 2022). As previously stated, Russia is one of the crucial locations identified by ASOS for worldwide expansion. However, considering the country's 2022 political instability, the apparel giant has opted to exit the country in March 2022.