The online fashion leader Asos faces challenges yet remains optimistic about competition.
- CEO José Antonio Ramos Calamonte is unfazed by rivals like Shein and Vinted.
- Despite a £379 million loss, Ramos Calamonte sees opportunity in a fragmented market.
- Asos focuses on enhancing its offerings rather than competing with others.
- The company’s adaptive strategies show promising indications of recovery.
Asos, a significant player in the online fashion industry, is currently navigating challenging financial waters. CEO José Antonio Ramos Calamonte has confidently stated his lack of concern over competition from platforms like Shein and Vinted. He emphasises that the fashion market is “incredibly fragmented,” with leading players holding only a 4 to 6% market share. This fragmentation suggests ample space for various companies, including Asos, provided they focus on delivering quality offerings.
Ramos Calamonte insists that Asos’s main focus is on its performance and customer satisfaction rather than fixating on competitors. “We are not worried about Vinted or about anyone else out there. We worry about ourselves,” he asserted. This perspective centres on the belief that while competitors come and go, Asos’s drive to innovate and meet customer needs will sustain its market presence.
In response to the rise of fast-fashion retailer Shein, known for its competitive pricing strategy, Ramos Calamonte expressed continued confidence in Asos’s business model, describing it as a “winner”. Despite reporting a full-year loss of £379 million, he remains assured that Asos brings a “unique proposition to the market” through its curated, trend-driven offerings and extensive range of third-party brands.
Asos has decided not to adapt its model to target an older demographic despite Shein’s popularity among younger consumers. Ramos Calamonte noted that the younger segment already aligns with Asos’s key demographic, exemplified through its “test-and-react” products, which are ordered on a short lead time and sell quickly.
Investment in the “test-and-react” model is part of Asos’s strategy to enhance its agility in responding to market demands. Approximately 10% of Asos’s own-brand sales currently come from this model, with plans to increase it to 20% next fiscal year. This approach has contributed to a 24% year-on-year increase in sales of new items, showcasing a strong demand for full-price products.
Even as the market remains volatile, Ramos Calamonte maintains a positive outlook on Asos’s trajectory. The performance of new collections, he believes, indicates a favourable turnaround is in progress.
Asos remains focused on its core strengths, confident in its ability to navigate market challenges and achieve growth.
