1. Comment
April 8, 2020

ASOS is better positioned than many to face impact of Covid-19

By GlobalData Retail

ASOS’ carefully planned strategy for the peak trading period of 2019 clearly worked, with the online pureplay reporting impressive H1 figures up against a troublesome 2018 – group retail sales rose 21.1% for the six months ending 29 February 2020. However, it will not be able to build on this momentum to drive similar growth for the full year, with H2 set to be significantly disrupted by Covid-19.

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What is the impact of China’s Zero-COVID lockdowns on economic activity, consumer goods and the foodservice industry?

While wanting to protect the country from being overwhelmed by Omicron, China’s adherence to a Zero-COVID policy is resulting in a significant economic downturn. COVID outbreaks in Shanghai, Beijing and many other Chinese cities will impact 2022’s economic growth as consumers and businesses experience rolling lockdowns, leading to a slowdown in domestic and international supply chains. China’s Zero-COVID policy is having a demonstrable impact on consumer-facing industries. Access GlobalData’s new whitepaper, China in 2022: the impact of China’s Zero-COVID lockdowns on economic activity, consumer goods and the foodservice industry, to examine the current situation in Shanghai and other cities in China, to better understand the worst-affected industry sectors, foodservice in particular, and to explore potential growth opportunities as China recovers. The white paper covers:
  • Which multinational companies have been affected?
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by GlobalData
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Sales over the past three weeks, since lockdown and isolation measures have been implemented across many of its key markets, have declined 20%-25%, as customers struggle to justify making new purchases. However, ASOS’ broad product offer across casualwear, loungewear and athleisure puts it in a better position than some of its competitors that rely heavily on occasion and partywear ranges, such as boohoo and Quiz.

Although we forecast UK clothing and footwear sales will decline 23.5% in 2020, the online channel will fare better with expenditure expected to fall 10.8%, giving online retailers the opportunity to steal market share, particularly from Primark , TK Maxx and Next.

While it will be a challenge for ASOS to manage newness coming through without its usual photography and styling operations functioning as normal and with demand much lower, it benefits from having an open sales channel, alleviating it from some of the excess inventory issues that other players will face when their stores and websites reopen. Additionally, it does not have the challenges of store costs and so should be able to better protect profitability while its digital expertise in terms of editorial and social media content will enable it to continue to keep shoppers engaged.

Free Whitepaper
img

What is the impact of China’s Zero-COVID lockdowns on economic activity, consumer goods and the foodservice industry?

While wanting to protect the country from being overwhelmed by Omicron, China’s adherence to a Zero-COVID policy is resulting in a significant economic downturn. COVID outbreaks in Shanghai, Beijing and many other Chinese cities will impact 2022’s economic growth as consumers and businesses experience rolling lockdowns, leading to a slowdown in domestic and international supply chains. China’s Zero-COVID policy is having a demonstrable impact on consumer-facing industries. Access GlobalData’s new whitepaper, China in 2022: the impact of China’s Zero-COVID lockdowns on economic activity, consumer goods and the foodservice industry, to examine the current situation in Shanghai and other cities in China, to better understand the worst-affected industry sectors, foodservice in particular, and to explore potential growth opportunities as China recovers. The white paper covers:
  • Which multinational companies have been affected?
  • What is the effect of lockdowns on foodservice?
  • What is the effect of lockdowns on Chinese ports?
  • Spotlight on Shanghai: what is the situation there?
  • How have Chinese consumers reacted?
  • How might the Chinese government react?
  • What are the potential growth opportunities?
by GlobalData
Enter your details here to receive your free Whitepaper.

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