China Can Be Deadly For Foreign E-commerce Firms

Asos, a leading fashion e-commerce operator in Great Britain, announced plans to end its China business after less than three years of operating in the country.

To reduce regional operating costs, the group will shut its businesses in China. Asos' Chinese website Asos.cn will be closed and its Chinese distribution center and office in Shanghai will also stop operations. In the future, the company's international site Asos.com will be responsible for delivery in the Chinese market.

Nick Beighton, chief executive officer of Asos, said that the group will serve Chinese customers with a model of lower costs and higher efficiency. In the future, the group will ensure the same service level as its Chinese official website. Beighton revealed that the closure of Chinese business will lead to GBP10 million in costs and GBP4 million operating losses.

Meanwhile, Beighton admitted that the Chinese market is different from other markets and the group's products did not gain the recognition of Chinese consumers.

On November 3, 2013, Asos opened its Chinese website and announced that they would invest about CNY100 million in the Chinese market over the next two years to build a localized operating team, covering customer service, delivery, and payment. In 2014, the company entered Alibaba's Tmall.com with the aim of attracting more users.