Asos today revealed it has brought forward its Russian website launch as it accelerates international growth. Retail Week looks at how attractive the country is.
Research from OC&C Strategy Consultants in collaboration with Google, reveals Russia is currently a £5.6bn online retail market, excluding food. But this market is set to double, growing to a value of £11.5bn by 2020, according to figures revealed today in its report, Britain’s Retail e-mpire.
“Russia is a high growth market for fashion and ecommerce”
OC&C partner, Anita Balchandani
This growth rate will put Russia in the top-10 ecommerce markets by 2020. And that makes it an attractive proposition for Asos, which is launching its Russian website tomorrow (Wednesday), earlier than the planned October launch.
OC&C partner Anita Balchandani explains that Russia is still finding its feet when it comes to shopping online.
“It is a high growth market for fashion and ecommerce and will be among the top countries to be targeted because Russia is still switching habits to e-commerce,” she says.
Meanwhile, Asos offers something unique for the Russian market.
“Access to the brand and product on offer at Asos would be very difficult for a local competitor to rival. So Asos’ offer is compelling, which is quite an advantage,” she adds.
Despite Russia’s shoppers having a certain level of English language proficiency, Balchandani believes a specialised website will ensure a greater uptake of sales.
But Russia is often viewed as a difficult market to crack due to its vast size.
Balchandani adds that one of the biggest barriers is the customs process, which she describes as “very convoluted”.
“You can have a pretty high level of product going missing due to the customs barrier and various bits of form-filling customers have to go through to release product,” she says.
“Given the breadth of the country, parcels can go missing in the last mile,” she adds.
But Asos clearly believes the opportunities Russia offers outweighs the risks, and is ploughing ahead with the launch, which will be followed by its Chinese debut, scheduled for October.
Asos today posted retail sales up 34% to £352m for the half year to February 28, 2013 and the etailer is set on huge growth driven by international as it targets £1bn of sales.
Although ambitious, the target is achievable, going by OC&C’s report, which found overseas online sales are expected to soar seven-fold to £28bn by 2020, with demand mainly coming from Europe, Asia and North America.