A little more than two years after expanding to China, ASOS decided to shut down operations in the region. Initially, it had thought its low-cost, trendy selection could lure a group of shoppers away from other domestic e-commerce options like Alibaba. But two years later, in April 2015, the company reported a loss of £ 5.2 million from its Chinese operations. In an interview, CEO Nick Beighton said “The Chinese market is unlike any other market we operate in. Getting eyeballs on our product has proved very difficult.”
That’s a surprising statement from a brand that excels in making its products visible in the U.S. and Europe. ASOS over-Indexed in search visibility and social media engagement in L2’s latest Department Stores study with a strategy combining creativity and standard best practices. The back-end of the ASOS site strategically places an Alt tag on each photo that allows images to be easily indexed on Google’s search crawlers. Structured Data Markups – rich snippets wrapped in span and div tags – enhance clickthrough and occupy search real estate on broad category searches. Creativity comes to play on Instagram, where a mix of cute animals, food pictures, and style inspiration have yielded 4.2 million followers. Fans engage with the brand frequently, as ASOS has the largest community size and most interactions among brands in L2’s Department Stores Index.
ASOS’s defeat in China suggests that success in Europe and the U.S. does not always transfer to APAC regions. For example, in place of Facebook and Instagram, WeChat is key to building relationships with Chinese consumers. The platform boasts more than 1.1 billion accounts and nearly 700 million monthly active users globally, up 39% year on year. More than half of WeChat users check the app at least 10 times a day, and a quarter of users check it more than 30 times. Furthermore, as brand presence on those platforms becomes ubiquitous (e.g. 98% of brands in L2’s China Beauty Index hold WeChat and Sina Weibo accounts), brands must differentiate with loyalty programs, store integration, sampling, and strategic use of influencers. This graph from L2’s Insight Report on Beauty China: WeChat shows how certain brands are more adept at leveraging their posts for maximum engagement, particularly Mary Kay and brands in the L’Oreal Group.
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